What’s New As Sun Goes Under?

I love sunsets, most of us do. My front deck in Belmont, CA looks due west and every night if we aren’t fogged in or it isn’t cloudy, and here in the hills of Belmont that is about 2/3rds of the days, we are blessed to witness the sun dipping over the low but lovely Santa Cruz Mountain peaks that separate Half Moon Bay from Silicon Valley – plenty of Creamsicle skies. Since I haven’t purchased a Cisco Flip yet and so haven’t recorded a sunset from my deck yet (note to family:  a missed holiday gift opportunity), I am sharing a short sunset I found on YouTube of one of the loveliest spots on earth, Gay Head on Martha’s Vineyard.

But I do not at all enjoy Sun Microsystems dipping over the the horizon of the IT landscape. When the Web exploded during the mid-to-late 1990s Sun was a darling of the new echelon. Their commitment to R&D resulted in a best-of-breed trifecta that included their own chips (Sparc), operating system (Solaris) and programming environment (Java). Add the fact that they “got” the Web in terms of vision evident by the prescient “the network is the computer” tagline and Sun basked in several years of notable success.

But Sun missed or was late covering several “left turns” in the industry:

1. Proprietary UNIX shifting to Linux
2. Proprietary boxes shifting to x86 servers
3. The monetization of Java – imagine if Sun had spun-out JavaSoft around 1999, talk about a cash war chest that could have carried through during the bursting of the bubble, hindsight is 20-20, alas.
4. The growing importance of middleware platform; Sun invested but didn’t execute well (remember iPlanet?). Imagine if Sun had acquired BEA and let them be. Instead, Oracle came out of nowhere, under the prod of Thomas Kurian, and became IBM’s alternative in a linchpin market.  Note that Sun wasn’t the only has-been in middleware, but the lack of any significant software platform north of Solaris left them quite exposed.

So be it, the big fish eats struggling fish phenomena is nothing new to the IT industry. What bothers me though will be the loss of R&D. Sun’s contributions of ideas and innovations had to be among the top in the industry on a per/revenue$ basis. Oracle, despite a legacy of organic R&D, is relatively speaking more of portfolio company than an R&D company, and will likely not maintain the level of R&D investment that Sun maintained in Sun’s product areas.

The golden era of Sun creativity centered around the likes of Bill Joy, John Gage, James Gosling and Eric Schmidt – and their many innovative compatriots inside and outside of Sun – their ilk may never be seen again in a commercial IT vendor.  Even in terms of marketing innovation the Java then JavaSoft team, with the likes of George Paolini, Jonathan Schwartz and Kim Polese, made things happen that had not happened before in the IT marketing space. Microsoft, not too shabby at marketing (yes, an intentional understatement) had all they could handle with the JavaSoft team.

But now we wait for the final setting of Sun Microsystems, and this is one sunset I wish would hide behind a cloud. What are the lessons to be learned from Sun? Two perhaps:

1. The balance between R&D and the realities of the marketplace must constantly be maintained and reviewed. Creativity cannot be buried under market tactics, but unbridled creativity can cause missed market opportunities, and eventually lead to a hubris and arrogance that can knock the pins out from the “execution” side of supplying IT.

2. Sun was often faulted, often by IBM, for partially hiding their light under a bushel (in an Eclipse of sorts). Make the R&D lines of demarcation extremely clear to your co-creators and partners: Project A will be utterly off base for anyone external (and most people internal). Project B will be an open book of participation and learning, even in a coopetitive environment. Trying to share your R&D but eat it too leaves one exposed to counter-movements, and you spend cycles covering your tracks.

It looks like the Oracle-Sun deal, after a scare with the EU, will actually close.  While the largest 16 IT vendors spent about $44b in R&D collectively during their respective fiscal 2008s, nothing to sneeze at and an average rate of 8% of revenue, Sun, spent more in the 13-14.5% range during the 2007-2009 fiscal years, and this while their financial fortunes were already well waning.  There are those, myself included, that think 2010 will be a return of investment for IT innovation after a dour 2009, even from VCs.  Thus there will be plenty “new” as Sun goes under.  But it is unlikely we will see anything quite akin to Sun during its heyday, a top vendor able to craft and nurture a culture of creativity that typically slips away from large vendors as they reach into the billions and tens of billions of revenues.

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