Interpreting Q2 – and IBM’s Behavior

So you’ve probably seen our earnings announcement – across the world, I want to extend a heartfelt congratulations to the men and women at Sun, and in our partner base, that drove us to a GAAP profit. I know you’ve all memorized those eleven words – so please consider yourself to have checked off the first two. Now it’s time to keep the discipline around driving earnings and cash flow, and move on to the next priority on the list (Grow).

The coverage has been pretty good – and the industry pundits are beginning to reflect the momentum we see out in the marketplace. I met with a (hugely passionate) member of the open source Solaris community today – I’d argue one of our most important constituents in the upcoming year. And I got a bunch of great ideas and feedback. But also a sense of validation – the big message I took away, “keep going, you’re headed totally in the right direction.” (Yes, I heard “Go faster,” too, among other ideas.) That felt great.

One of the industries that showed revenue growth this quarter was financial services. For those that watch Sun, you’ll know our decline on Wall Street was pretty dramatic (and ugly) over the past three years – and after a ton of hard work, in the engineering world, in the field, in the support organization, absolutely everywhere – we saw growth. Double digit growth, even. And this from the folks who tossed us out on our ear a few years back. What doesn’t kill you makes you stronger. (And humbler.) To our customers on Wall Street (and around the world’s financial community), thank you. For your patience and feedback. And your Q2 purchase orders 🙂 And to our incredible field team – great job, folks. Great job.

But what’s been really interesting is noticing who’s not necessarily been so supportive of helping us drive more opportunity with our financial services customers: IBM. Yup, IBM’s deployed in a number of customer accounts we share, and with the rapid uptake of Solaris 10 in early access, some customers have been running into dependencies – from MQSeries to Tivoli, Rational to DB2 – that stand in the way of their deploying Solaris. What’s IBM’s stance on Solaris 10? “There’s no demand.” Please. We know groups of our customers have called in directly to IBM seeking Solaris10 porting dates – and heard the same story, “you’re the only customer that wants it.”

Which frankly, is pretty infuriating. A few of those customers have said it feels like the “old IBM,” the anti-competitive monolith that attempted to “lock and block” customers into proprietary IBM solutions. So if you run into an IBM representative, make sure to let them know you, too, would like to be considered the “only customer that wants it.” More seriously, that they shouldn’t attempt to lock customers in.

Come on, IBM, you’ve got nothing to fear – Solaris is open source, it’s cross platform. It’s even indemnified. And here’s some free advice: you can’t lock customers in. They always, always, have a choice. Personally, I wouldn’t tempt them to exercise it.

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