SUN’s Success?

I have owned a tiny bit of SUN stock for several years now, and thus I try to follow the company and McNealy's various strategies. SUN has been in the press a lot lately, and now there is this and this, both discussing Sun's future.

Milunovich believes that Sun's software strategy, particularly its aggressive pricing, could be disruptive to Microsoft and IBM but that the company "faces an uphill battle with its against-the-grain strategy of Solaris on Intel and Linux on the desktop."

Sun's strong balance sheet–it has $5.7 billion in cash–provides a solid foundation while the company tries to get back on track. The company has triumphed over seemingly insurmountable challenges in the past, such as the encroachment on its workstation business in the mid-90s.

But this time it's different. Sun is competing with a broader range of companies and has found itself in the position of playing catch-up. It has suffered a string of executive departures, most recently its co-founder, technologist Bill Joy. Its challenge will be to stay relevant to its current customers and, via innovative technology and pricing, become relevant to those who are not.

If McNealy pulls that off, he will go down as a magician extraordinaire.

I think McNealy misread where the industry was heading, but he seems to have a better sense of direction now. The article is right about one thing – if he pulls off a transformation of SUN into a player again, people will be writing books about that. It isn't going to be easy.

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