Skip to main content

SUN Microsystems Possible Spiral Death?

I have always thought that SUN Microsystems is a confused company. Their strategies are unclear and they always sent mixed messages to the industry. While Scott Mcnealy was CEO, he guarded Solaris and JAVA while launching Linux initiatives.

Today I read in Reuters and IT Business Edge that SUN Microsystems is trying to avoid failure by finding a Buyer and after they had cut a deal with their one-time mortal enemy in order to get some much needed cash. Sun shares have nose-dived 77 percent this year, more than double the decline in the Nasdaq Composite Index .IXIC, to around $4 per share, a 13-year low. The stock is down 98 percent since year 2000, the peak of the dot-com boom. On top of that, in October 2008 they reported a US$1.7 billion quarterly loss!!! This has created speculation that the firm will be sold. But for what price do you sell a company that is losing US$1.7 billion a quarter, in a Buyer’s market?

Sun is a very complex company that would be very difficult for those that have the money to integrate. Finding a buyer will be almost impossible.

In addition to HP, IBM and Dell, three technology bankers listed Cisco Systems Inc and Japan's Fujitsu Ltd, which already has a business partnership with Sun, as natural bidders. They spoke on condition of anonymity as they would vie for the business if Sun puts itself in play.

But these companies may not want to take on the challenge of integrating Sun, which has a market value of about $3 billion, given the turbulent economy.

Sun may have more luck splitting its hardware and software divisions and selling them separately, although valuing the parts may be a challenge because they are tightly linked. The odds don’t favor SUN surviving this at the moment. Certainly not intact, anyway. It is likely to be followed by others. So how do you choose who wins and who fails?

Good luck Jonathan Schwartz. I wished you guys have listened to your Clients during the dotCOM era and launch a Linux strategy which could today be the force that is driving SUN and your other acquisitions.

Comments

Popular posts from this blog

From Toilet Cleaner to CEO

On 22-April-2012, my entrepreneurship journey story was published by The Sunday Times in Singapore by Mr. Wong Kim Hoh

Strategic Plan vs. Operational Plan

Strategic Plan Vs. Operational Plan: Do You Know the  5 Main Differences ? What's the difference between a Strategic Plan vs. an Operational Plan? Both are plans but are they the same? If not, what’s the difference? Do you need both? Why do we need both?  After mentoring Start-Ups from pre-revenue to achieving at least S$1M in revenues since 2012 and supporting growing Small-Medium Enterprises within the S$4M to S$10M range revenues, whose leadership teams are stuck in their day to day operational matters and fire-fighting, I hear these questions frequently.  My response: A  strategic plan  outlines your Vision, Mission, Core Values to build the Culture with high-level goals for the next 3 to 5 years. It also takes into account how you’ll measure those goals, and the major projects you’ll take on to meet them. An  operational plan  (also known as a  work plan ) is an outline of what each of your business d...

The 4 Essentials of Effective Leadership

I read this article written Mark Raciappa, ActionCOACH and I totally agree. His communication is clear, concise and it resonated with me. Mark says; I remember a bumper sticker: “Either Lead or Follow—But Get Out of the Way!” Interestingly, in my company , I say something similar and it goes like this "If you can lead, lead. If you can't lead, follow. If you cannot lead or follow, get out of my way! Mark continued to write that, when our role calls for the former, here are 4 important things to keep in mind: 1. Great leaders communicate. Realizing that good communication is a 2-way street, we must be responsible for our part. That being said, true communication is the response that you get. Whatever form you choose (verbal, mail, e-mail, etc), if you don’t get the outcome you seek (from a “willing” recipient), the responsibility lies with the sender. Great leaders confirm, gain commitment, and solicit feedback to improve the process. 2. Great leaders make decisions...