Explaining Sun’s Share Gains

When Sun was in trouble a few years back, I was really frustrated by a simple reality of open markets: when you’re down, it’s not your answer to the question “why?” that matters. It’s your competition that’s quoted everywhere. “Here, let me tell you why Sun’s having a hard time.” It drove me nuts. (You’ll recall, “Why is Sun down?” “Because they’re proprietary and expensive, and all customers want is a cheap box.”)

So over the past couple weeks, spiking yesterday with the release of industry market share numbers showing we outgrew the market (in my new role, I’ve been counseled, not by our general counsel, to avoid saying “we spanked the market”), I’ve been getting a lot of questions going the other way – wanting my view on why our peers are shrinking or troubled.

My answer? I have no idea, go ask them. I don’t spend a lot of time thinking about it.

I can tell you why I believe we are succeeding, however. I do spend a lot of time understanding our pipeline, wins and losses.

We’ve been saying for a while, for the customers we serve, innovation is about the only thing that matters in winning business. Cost of acquisition is a nit – compared to the cost of operation and management. A cheap Ferrari doesn’t help a transport company that needs to move 10,000 people every day. They want a bus.

And no, this message doesn’t resonate with everybody. It goes over like a lead balloon when you’re selling to a flower shop in a shopping mall. Or a dentist’s office or restaurant. They want a cheap box. But that’s not our core market, that’s someone else’s. In my view, they’re both going to stop buying infrastructure, anyways. Here’s my CRM advice for both: shut down your servers, go directly to salesforce.com. We at Sun will then focus our time on salesforce.com. And believe me, IT matters to them. And they are spanking the market. Sorry, handily outpacing the market.

Secondly, the proprietary and expensive moniker is now dead. Dead dead dead. Solaris is open source, and gaining huge share (to my friends in the analyst community: you should stop saying the x64 market is characterized as a Windows and Linux market – when it’s obvious there’s a growing Solaris market on x64 systems). SPARC is now open source and gaining its rightful place in the industry standard server market – with Niagara’s focus on eco-responsibility and energy efficiency seeming awfully timely. Our new lineup of UltraSPARC IV+ systems are cheaper and faster than IBM’s Power systems (one customer just told me, “they’re appropriately named when you get your electricity bill.”) And our Opteron lineup is just, plain, awe inspiring:

But then there’s the most fundamental answer to why we’re gaining share.

I was sending out a note of congratulations to one of my staff members this week, when we first got wind of the data. And then I figured, it wasn’t just his team, it was both our hardware/systems teams. And our software team for Solaris. And our marketing team, and our global sales and service teams. And our amazing ops team. And the corporate functions keeping the wheels on the bus while we’re restructuring it. It was every one inside Sun, and all our supporters in the market.

Great products take great teams to gain share. So why’d we gain share?

We had a few good people focused on it. It’s amazing what you can do when you put your mind to it.

And just in case you missed the news, here’s a couple good articles:

Sun’s server sales soar, while Dell bores in Q2 — The Register
Sun Overtakes Dell In Worldwide Sever Revenue — InformationWeek


Filed under General

20 responses to “Explaining Sun’s Share Gains

  1. Prince

    I am impressed by SUN’s server revenue growth. With a hot US summer every data center guy has understood the importance of getting energy efficient servers and not just the “cheap” server. I see a big growth in SUN’s energy efficient servers. Who wouldn’t want power efficient servers ?
    In one of the Sun related news i read Solaris actually boosted the server sales. That is a perfect answer to the super-intelligent guys who screamed “What ?! You are giving software for free?” .
    UltraSparc-IV+ marching ahead with bumped up speed is spectacular. What is the next speed target ?
    Finally i bless SUN to gain more market share from the competition ( and my SUNW stocks, there are sizzling. ).

  2. Jonathan.

    Sever should be server in the InformationWeek link.

    On the reason for success: indeed, it’s the people who actually do the work and do it well. Well-deserved kudos if you ask me.

  3. P Holahan

    You’ve got the “Big Mo” now. Keep going & well done.

  4. Sun is doing a great job. It is already the third server supplier worldwide. But I think you guys will need to reinforce the marketing strategy to outplace HP or IBM. Sure Sun has a great product under the technological point of view, but superior technology is not sufficient to win in innovative markets, evolving the product and the strategy more rapidly than competitors is.

  5. Anantha

    This news is validation of the new approach/strategy at Sun. Whether one likes it or not Sun is BACK! This time as an adult with battle wounds to show. I’ve told my friends many a times, you never write Sun off because they are like a street kid and as such very resilient. Now the next step of this rehabiliation is the numbers to start showing up at the bottom line. Don’t mess with a good thing: Niagara, Solaris 10, and x64. HP is doomed because of their Itanic commitment, so you can be singularly focussed on IBM & Dell. Good luck.

  6. Sun consulting services folks should also attempt to engage in dialog with us enterprise customers via blogging and seriously consider adding us to their blogroll. Most Sun folks only add other sun folk.

  7. Paul

    I knew you would gloat.
    Hope the trend can continue though.

  8. Yes, you can celebrate no doubt about that – you guys deserve some kudos for this achievement.
    My gut feeling is that Sun, IBM and Dell will soon be the biggest players in the Server market. Dell will beat everyone because they can produce Intel and AMD servers.
    The market is heating up.
    — Thyaga

  9. Jonathan,
    Congrats on the gain in market share. You blog kick ass here. And that Opteron box is neat.

  10. Jimbo

    Talking about power per watt… When are we going to see Core 2 based servers in Sun’s lineup?

  11. I just mentioned on the Salesforce blog how nice it is when customers blog nice things about us. The very next day the CEO of a Fortune 500 company blogs something nice about us.
    Tomorrow, I fully expect the Whitehouse to make a favorable mention towards us, and on Sunday, the Pope will skip sermon to blog about us. It’s just one of those weeks, I tell you.

  12. Mayuresh Kathe

    Great news again.

    On a similar note.
    Open sourcing Java (as in GPL) would be a disaster, forks are just waiting to happen. I bet the strategists at Sun must’ve recognised this threat, it would be really sad if you’re going open just because you are being compelled to go open (as in GPL).

    Frankly, most Java developers really don’t care which license it is released under, what matters to them is that Java continues being backed by Sun as has been the case till date.
    Yes, what Sun could do is improve upon the systems which would allow a user to download Java (JVM, API, etc) source code, work out enhancements/bug fixes and easily submit them back to Sun.
    The existing system for getting Java (JVM, API, etc) source is good enough, what is bugging third party core developers is the non-existence of a “smooth” mechanism to submit stuff back, there’s also the case of incentives, maybe giving credit and sending them Sun/Java T-Shirts would be nice, maybe giving them some kind of discount on Sun hardware would be even better πŸ™‚

    Finally there’s the case of too many different UI elements at Sun.
    Sun is bound to support CDE/Motif, since legacy applications depend on it.
    The move to GNOME was really smart, you get a modern toolkit which is being heavily tested by developers across the globe, and a big collection of applications.
    Then there are the UI elements in StarOffice which have a life of their own.
    And finally there’s Java. Swing itself has a bunch of themes and new ones are being added on a regular basis. Are users really demanding so many different LnFs? I believe not, its more of Sun trying to be “in the game” following Apple and Microsoft.

    You’ve constantly stated that your target market is not the “cheap box” market, but it is the “cheap box” market which demands cheap interfaces like Aqua and Aero Glass.
    You are Sun, your target market is people who value performance and stability over gimmicky user interface elements, why don’t you invest money in hiring a good UI elements designer and maintain one elegant and consistent set of UI elements across Motif (yes it can be done), GNOME, StarOffice and Java Swing?
    There is strength in uniformity, and since currently Sun is in a state of flux, now would be a good time to come out with something different and good.

  13. I agree with the importance of innovation, Jonathan. Thanks for keeping it alive and thriving at Sun. It was Arie de Geus, author and former executive at Royal Dutch Shell who said that “The ability to learn faster than the competition is often the only sustainable competitive advantage a company can have.”

  14. Jimbo

    > Open sourcing Java (as in GPL) would be a disaster, forks are just waiting to happen.
    This statement is such a load of garbage, Mayuresh. Sun can protect the integrity of Java compatibility in a number of different ways, the most obvious of which would be to open up a Java trademark program where nobody that isn’t shipping a compatible implementation cannot use the trademarks. Please stay away from polluting the Internet with nonsense like this, as it is completely counter productive and untrue.
    A far better issue to raise would be this: why did an open source company that Sun claims to be allow GCJ/Classpath developers to put all that effort into an alternative implementation without offering help by releasing Sun’s JDK code under a compatible licence? And let me remind you, GCJ folks have made things work (to a degree) that Sun couldn’t after being asked for over three and a half years (64-bit Java plugin for web browsers). Why is Sun letting people that are obviously motivated to improve Java not do that properly?

  15. Mayuresh Kathe

    Yo Jimbo, you shouldn’t be posting replies to posts on someone elses blog and that too attacking on a personal level by calling my statements a load of garbage or even advising me to stay away from polluting the Internet with nonsense.

    Sun already has a Java trademarking program in place, any Java (JVM, API, etc) implementation that wants to use the Java brand has to pass compatibility tests.
    Your statement is redundant.

    About GPLing Java, its a pure disaster move, look at Linux, too many distros, too many incompatibilities, the Linux world is a mess just waiting to destroy itself being consumed by its own rabid desire to re-invent everybody elses ideas.

    Sun should retain absolute control over Java, yes, as I mentioned before, Sun should implement a better mechanism for allowing developers to submit code enhancements which would need to be scrutinised heavily before being integrated in the main tree.

    Frankly, GNU code sucks, and it sucks big time, the quality is ghastly, especially if you compare it with industrial strength stuff from Sun (or even HP, IBM and OpenBSD).
    And then again, as you mentioned, the GCJ folks made things work “only to a degree”, not fully.

    Finally, your logic is flawed, how would it help if Sun released its code using a license compatible with GCJ? Wouldn’t that make two products (one complete and the other crippled) using the same license?
    Or, are you implying that Sun should go with GPL to allow the GNU people to readily steal good code, apply it to their crippled implementation and then claim that GPLed stuff works as well as anything else?

  16. anaborg

    Congratulations, I like this idea of your weblog when we can add our comments.
    For me SUN means “Innovation” and clever HW/SW/ISVs/SUPPORT in “UX” (UltraSparc, UniX, linUX, X64,..) now you almost have it. The customers will always appreciate it, if not we already have IBM and other alternatives.
    Good Luck with your strategy, I hope it works for a long time.

  17. Yeah, it’s all nice coz I bought at 3:80, but thing back to the guys that bought you at $60 or so. In martial arts you are always shown now: right here, as where the sitations lies. Be here how. You have the right energy in the right place at the right time – project it carefully with honest intent to better the world, and it will all be good.

  18. Jimbo

    Hi Mayuresh,
    > attacking on a personal level
    Saying that you comments are garbage and nonsense is not a personal attack. It just happens to be fact.
    the Linux world is a mess just waiting to destroy
    See? More garbage. If you actually understood how GPL licence works and what it requires from the distributors of software, maybe the “garbage effect” wouldn’t be happeninig. So, try reading the licence, researching the “forking” etc. It may help.
    GNU code sucks
    Opinion shared by all Solaris administrators using http://www.sunfreeware.com/, I’m sure πŸ˜‰
    “only to a degree”,
    Which is about infintely better than what Sun did so far, as their implementation doesn’t run on this combination at all.
    Finally, your logic is flawed, how would it help if Sun released its code using a license compatible with GCJ? Wouldn’t that make two products (one complete and the other crippled) using the same license?
    Or, are you implying that Sun should go with GPL to allow the GNU people to readily steal good code, apply it to their crippled implementation and then claim that GPLed stuff works as well as anything else?

    You haven’t been paying much attention to what Jonathan’s been saying, I’m afraid. Open source is about communities and there is a few open source communities already out there. Maybe, just maybe, Sun should try to be part of those communities by sharing the development effort?

  19. Jonathan
    We are perhaps your smallest ISV partner (today and hopefully not tomorrow). I used to be a SCADA Engineer (Consultant) many years ago. In case you do not know, SCADA systems are used to control electricity networks (these days simpler versions are used for many other things. e.g. building management). We used to recommend Unix and in most cases SUN platform or DEC. Then we had to fight with clients who liked Windows NT GUI.
    Today I run ebdex. A start-up with a big dream (nothing new there!). We decided to use Sun as our core platform to give the scalability, reliability and resilience.
    We are different. We are seen as an IT company, yet the intention is to not recruit a single IT staff (this is changing slightly as we speak). So we went for partnering.
    Challenge for us is not convincing our clients, but convincing our partner who develops our software that Sun is the right platform for us. Lot of people out there think Solaris is dead! Yet you indicate it is pretty much alive.
    Can you publish some statistics on the contribution that ISVs are making to Sun empire?
    It would also be useful to see comparative analysis/info on Sun Applications Server vs Weblogic vs Websphere.

  20. Hi Jonathan
    Your blog points out a number of advantages of SUN systems. However, as an ex-marketeer, I suggest that your company (and share price) would do even better if one make it easier to exploit these advantages. As one example, your earlier post describes the rebate that is available in California due to lower electricity consumption. However, no description (or link to an article) of how to get this rebate. I see that at least one person has posted a comment that they were not able to get the full rebate and they are not sure why.
    Having product advantages is great. Making it extremely easy for clients and users to take advantage of them will be even better.

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