Sun posted miserable earnings, and everybody is surprised… As a result Sun is dragging down tech which is completely wrong. This a Sun problem, not tech. I had an hunch that Sun would disappoint quite a bit. Why? Because at the beginning of March I heard whispers that Sun was loosing some major sales. It was a major shorting opportunity (Disclosure: I have not shorted JAVA, and have no intention to do so.)

The problem is that Sun has lost its way. It is a sad occurrence, but completely predictable. Sun made money by selling big pieces of hardware for high prices. That worked until the .COM bubble burst and Sun has not been able to get its way back.

So how did Sun innovate to find its way? They renamed a ticker from SUNW to JAVA. (Twits..) They bought Star Office and did nothing with it. They bought an Open Source database when MySQL was loosing momentum to PostgreSQL and others (mainly due to licensing issues of the driver being GPL). And lets not even begin the discussion on how they lost the Java momentum.

Sun is lost, and it is not coming back.

If I were to invest in Sun I would want to see the following:

  • Figure out what they are good at and stick to it.
  • Get rid of trying to ride the Open Source wave since no company has been effective from a sales perspective. Look at the sales of Red Hat, and Novell and you will see what I mean. Open Source does not translate into more sales and a better bottom line.
  • Get rid of Open Office or Star Office. You are not doing anything with it, other than loosing money.
  • Build a box that we will call the computing box. A computing box is a device that people, corporations can buy, lease or rent. The idea is that they can store data, run processes on it and have an automatic connection to the Internet. You will not attract enterprises with this box, but you will attract small businesses, home businesses, and families. Why? Because they get a full fledged computing device without the hassle. Think of it as cross between Apple and Google Apps on hardware.
  • For the enterprise build a bigger computing box. The idea behind the mirror box is to mirror the data and operations of your clients. Think about it, you can install any software and there would be automatic load balancing and distribution. Google Apps will make it into the enterprise.

BTW I think that Schwartz should resign and be replaced. In fact I think the entire upper level of Sun should be replaced with new blood. Though I doubt any of that will happen. Instead Sun will just grind to a slow and painful death.