Bladewatch.com

Cnet

Sun Microsystems has adopted an ambitious business model that depends upon commodity open-source downloads serving as loss leaders and gateways for hardware and services revenue. According to a report in The Register, however, profits have been hard to come by for Sun, which may have been what scuttled its merger with IBM.

Using Red Hat as a foil, The Register suggests that the way forward for Sun, which has seen its proprietary businesses commoditized, may be to commoditize itself further:

The open source distribution model cannot generate the kind of profits that Sun’s shareholders became accustomed to in the dot-com boom, where every deal started out with a Sparc/Solaris server and moved on to Oracle databases….

I can’t imagine how Sun’s software business–particularly if customers abandon Sparc platforms or Sun has to basically give Solaris support away for free to cover the costs of Sparc chip and server development–can do any better than Red Hat has done on commodity x64 iron. And in the end, the decline in Sparc prices cuts Sun’s profits, no matter how it dices and slices the categories and numbers in its presentations, just as the same economic pressures from x64 iron on the one hand and Linux and Windows on the other have done for all proprietary and RISC/Unix vendors.

There is no escaping the pinchers, other that to use the tool yourself. And that means Solaris and x64 are likely Sun’s future–and Sparc, for all its great engineering, is probably not.

We’ll have to see, Sun remains a great business, and has quite a following/reputation. I think it needs to continue the innovation of it’s platform, reach out to its core audience and see how it can facilitate their needs. I wonder if they might not do well continuing to offer their industrial strength servers and commodity low end get the customer in the door ones? At the same time though, I don’t know what value it would present to Sun in competing at the lower end of the market?

Could it not simply extend it’s reach into open source, demonstrate itself as THE open source supporting vendor, aiding in monitoring and integration tools, of support and platform innovation?

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