Ed Zander helped build Sun Microsystems into a server powerhouse. His imminent departure as president and chief operating officer highlights theneed for the company to evolve beyond its hardware-first focus.
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Zander led Sun into dominance of the server market, but that position cameat the expense of software and services. Despite significant investment,the company's software initiatives have proven only moderately effective becausethey lacked complete commitment from management. Moreover, many investors measureSun's performance based largely on server sales, an attitude that makes changing the hardware focus more difficult.
Other challenges that Sun must overcome include the following:
• The company relies too heavily on selling servers based on Solaris and Sparc, of which Zander has been a strong proponent. Enterprises increasinglyseek more flexibility from hardware vendors than Sun traditionally hasprovided.
• IBM has taken away market share from Sun in Unix servers. Linux could takeaway market share in the low-end, high-volume market.
• Sun's new Sun Fire 15K faces serious competition at the high end, which its predecessor, the Enterprise 10000, didn't face.
• Services have become a major part of enterprise requirements, but Suntrails IBM, Unisys, and the soon-to-merge Hewlett-Packard and Compaq Computer.
• Policy-based computing initiatives have become important for enterprises.Sun has not garnered as much "mind share" in this area as IBM (ProjecteLiza), HP (Utility Data Center) and Unisys (Server Sentinel).
The reorganization of top management will enable Sun to revise its businessmodel by making software and services a strategic focus. It could bestachieve that goal by appointing a software-focused executive as the nextpresident or chief operating officer.
At the very least, Sun must give Jonathan Schwartz, newly appointed to headthe Sun Open Net Environment unit, the freedom and resources to build a leadingsoftware platform. Otherwise, Sun will not likely succeed in software andservices any better than it has so far.
(For a related commentary on Sun's server line, see gartner.com.)
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