For those that missed it, definitely worth reading:
Innovation takes longer to deliver than a simple price cut, but if Q1 is an indicator of things to come, has more lasting value as a competitive weapon. For our customers and our shareholders. To be perfectly clear, lowering price is a tactic at Sun, not a strategy.
I was asked yesterday why we’re gaining share – I said three reasons:
1. Solaris and Java are gaining momentum
No one can possibly dispute the impact free and open source software is having on the world – as the OpenSolaris and OpenJava communities continue to expand, as downloads and adoption increase, so does awareness of Sun’s (and other open source community member) offerings and the total revenue opportunity. We gain share when customers deploy apps built on our platforms at a rate exceeding others. When our customers grow faster, so does our share – of licensed software, services on free software, servers and storage.
2. Galaxy, Niagara and Panther*
This one’s more obvious – customers prefer our products when they’re faster, draw less power and take up less space than the competition. World records help. But it’s the total equation at this point – the “performance at any price” mentality is fading fast: just ask a Web 2.0(TM) startup what portion of their operating expense goes to electricity – you’ll be stunned.
3. Sales and Service Execution
I was talking to a customer yesterday, one of our largest, and asked “how are we doing for you?” I presupposed the answer would surround our product roadmap, given how much time we’d spent getting them up to speed on where we’re headed. The response had nothing to do with our products – their CIO just said, “your team is doing great for us, we love doing business with them.”
When it gets right down to it, especially for our largest customers, people buy from people.
So congratulations, folks – well done, across the board.
* those are code names for internal server projects, and I just earned myself some hate mail from the product groups that want me to stop using project names…