Tomorrow’s Fortune 500

I remember a particularly unpleasant conversation with a Sun executive about a year ago. The introduction of our “eco-responsible” Niagara systems had just blown up a $250,000 purchase order from a big customer, replaced by a $25,000 Niagara (sorry, T2000) order. “You’re killing me,” he said, “are we trying to shrink or grow this place?”


What followed were some choice words about headquarters being out of touch with the field, not understanding real world challenges, pricing going in the wrong direction, etc. And frankly, pricing Niagara was a big bet – putting a price on innovation is an art, not a science. And lest you ask… yes, we’re trying to grow, not shrink.


But there’s an interesting phenomenon in the computer marketplace, which strikes some as counterintuitive: if you double the performance of a machine, customers don’t buy half as many, they tend to double their order. Same goes for utilization, if you can double server utilization via Solaris containers or VMWare, people don’t buy fewer computers – they buy more. The value of innovation, at least to our core customers, is growing so fast that if the price declines, the overall return (value/price) goes through the roof – encouraging a feedback loop. Moore’s Law and free software drive relative pricing down, and customers accelerate their growth.


So I had two pieces of advice for the unhappy executive, 1) I’m sorry to hear about the order (executives are people, too), 2) please make sure your teams are selling into our competition’s installed base, not just our own, and 3) trust the market will grow.


Since then, our Niagara systems have ramped from $0 to more than $100M per quarter in only two solid quarters of shipment – while our overall (multi-billion dollar) systems business has grown by double digits (while many of our peers have shrunk). The growth of Solaris 10 on HP, Dell and IBM certainly drive awareness for our innovation, but pricing’s been working in our favor, too. Even our trusty friends in the analyst community have taken note of our consistent share gains.


And although I’m thrilled to see our share gains, I’m worried our growth masks a trouble spot – among customers that don’t buy $250,000 at a time, but more like $2,500 – startups and small companies. Granted, we are making headway with a few very cool startups, but there are too many signs that all’s not well in a market that daily redefines the network. Do I have data? Not perfect data, but certainly anecdotal evidence. As an example…


Recently, we held an “unconference” for startups in the Silicon Valley area – an unconference is one in which the agenda is defined by its attendees, after they arrive (sounds strange, but it totally works.) We had solid, even overflow attendance at this event.


Nearly all of the feedback was positive. Nearly. But there was a troubling, and consistent message. It usually went like this, “wow, this is a great idea… thank you, Sun. But hey, why are you guys here? I thought you built big expensive stuff that ran in banks?”


Ouch.


It was a message delivered with sufficient frequency that we’ve started to really focus on acquiring new customers – and no, not just banks and telcos, but new companies. The startup community, a traditional stronghold for Sun.


So if you are a startup, or you know someone who is, please send them the following.


We are committed not only to growing in today’s Fortune 500, but tomorrow’s, too. And as you know, all our software is free for the asking (you pay only for commercial support, when you want it). From Java to Solaris to NetBeans, to everything in between – it’s all free for the asking.


But we can’t just give hardware away for free (at least permanently). And we know you’re price sensitive – so we’re going to drive prices into the ground to lower the cost of using Sun’s newest innovations. As of now, that’s exactly what we’ve done. If you’re a US business that’s been in business less than 4 years, and you employ fewer than 150 people, you’ll find this blog posting very interesting. Just go look at what Thumper will cost vs. any of our storage competitors (by our calculations, we’re about half the price). Just click here to apply for the program.


And yes, we are in the midst of globalizing this program as we speak – “younger than 4, fewer than 150” isn’t a global definition for a startup (that’s known as a midsize business in some places).


Why are we doing this, even though we’re showing great growth?


Because growth in our installed base is nice. Growth in the competition’s installed base is better.


But growth in tomorrow’s installed base is best of all. And by definition, every large customer Sun serves today started as a small customer.


Remember, just click here.

40 Comments

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40 responses to “Tomorrow’s Fortune 500

  1. Alex

    Jonathan and everyone at sun,
    I think you are in the right direction in almost every way. But make it easy for people to see pricing and to buy quickly. As an edu purchaser it involved 4 or 5 phone calls to get the correct price, then turned out to be easier to order from CDW-g.
    It doesn’t hurt to simplify the pricing and show 4 options, with the threshold to reach them. (Individual(0), Startups($10,000/yr), Medium Business/Education(etc), Large Business/govt(etc)).
    Show the value in purchasing more sun products on the website, not with sales calls and direct channels.
    Just a thought, there is beauty in simplicity.
    -Alex

  2. mj

    I don’t understant why Sun doesn’t buy EnterpriseDB before Larry does, he’s already gobbled up (excuse the put) sleepycat. Why is Sun being so nice to Oracle, isn’t Larry the one who said a few years ago that Sun was history that IBM on the high end and Dell on the low end would squeeze SUNW. EnterpriseDB would squeeze Larry so tight he’d have a rudder. Seems to me that SUNW would have an offering better than Dell,IBM or HP. Best of Luck, MJ

  3. Dennis

    Hello,
    “I thought you built big expensive stuff that ran in banks?”. That seems to be exactly your problem. Your company is simply unknown in the non-IT business world. And you know why? You don´t advertise, I least not here in Germany. Your competitors Dell, HP and IBM do this every day, so people know these company and when a new what-so-ever server is needed, they turn to these companys.

  4. EU Customer

    There’s more to the planet than just the US you know.
    I’m getting agravated by all these great programs usually only applying to the US.
    Meanwhile, if you’re living in Europe not only can’t you connect to the Sun Grid, you have to deal with a ridiculous $:€ conversion ratio (>15%-<30% difference at this point, how’s that for a price premium, especially for a startup), almost no offers whatsoever, and of course, at least here in The Netherlands, Sun really does only bother with big companies.
    To illustrate the price differences:
    A Sun Ray 270 costs almost $1.100,-, ($869,- US)
    Your basic T2000 8-core,8GB,2x73GB model will put me back almost $17.000,- ($14.595,- US)
    And a X4200 M2 w/2xOpteron 2218,4x4GB adnd 4×73 will cost me over $16.000,- ($13.895,- US)
    That’s all other stuff excluded of course:-/
    I don’t mean to whine or anything, and we’re a happy user of Sun stuff, but your growth here could me much stronger (in startup and SMB land) if you(r local department) attended a few measly little details such as these.

  5. Ahsan

    Dear Jonathan,
    interesting approach to marketing.. well, we have 6 private telcos operating here in pakistan. they are pretty much startups by the standard you’ve set forth. In the past 5 years, they have eaten to the bone the “installed base” of the state-owned telco. They’ve used essentially this same approach of bringing down the service/product prices and growing the customer base at the speed of light. All I can say is, this new approach at first glance challenges my beliefs about marketing but I have a hunch that this might be the road ahead, at least for the technology sector. Good luck setting trends!

  6. Andy

    Whilst I think its very nice of Sun to offer incentives to startups..surely publishing lists of the discounts available to startups will alienate any customers/potential customers who aren’t eligible to the same level of discount.
    Put quite simply, why should $startup get to buy sun kit for £X when I have to pay £(X+10%)?

  7. Why stop at startups Jonathan?
    Home users may get benefit from a reliable server.
    I’m looking for a small server, on 24/7, under my desk in my office.
    Quiet, no monitor needed (I have another box next to it I could
    use as a network based terminal if needed) and above all reliable.
    Just forget it for months at a time.
    Not especially powerful, basically my svn usage, serve a few web pages.
    Your blog price list is about what I’d pay for a Wintel box,
    why not try that market?
    Some people still believe in Sun.

  8. Jason

    I think of the biggest obstacles is your sales force. The feedback I consistently get from small companies (like what you want to target) is that if you’re not a Fortune 500 company, it doesn’t matter how much money you want to spend on Sun equipment — it could be $2000, it could be $2mil, you are deemed unimportant and are completely ignored. I hope part of this focus includes fixing this attitude, as it also tends to generate a lasting negative impression, regardless of the quality of the products.

  9. Anantha

    Excellent, this is good news for startups. As an investor and ex-employee of Sun I’m watching every move in the marketplace. Referring to an earlier post by you (at least 9 months back) that was talking about how processors go in 5 cycles and you thought that Sparc had the Mojo going into the second half of the decade, I believe you’ve the Mojo. Execution (logistics and financial) is the key now, your R&D has delivered. Good luck.

  10. As I’ve always maintained, what you’re doing is good, but it isn’t fetching the right results, atleast not yet.

    Take for example the company I worked for a while back (Cleartrip), while the so called CTO was jumping around like a gorilla claiming the absolute superiority of Java for enterprise grade applications he was absolutely averse to going in for other Sun products.
    Leave alone the hardware, which he constantly quoted as being flawed in some or the other area, he didn’t even want to touch Solaris with a pole.
    All this even after me consistently pushing Sun as well as getting outside help by way of interactions with Sun vendors.

    I believe Sun really needs to educate the decision makers about how good the hardware/software combo has become of late.
    And be especially harsh on entities spreading F.U.D.
    Maybe, take a page out of Steve Jobs book about dealing with rubbish mongers quickly and mercilessly.

    Being nice is good, but certainly not at the expense of your own life.

  11. Mark

    I like what’s happening with the lower power servers, Blackbox and open Solaris. It’s also good to hear that Sun isn’t just interested in the telco’s and banks, but maybe other comments you have made could be misunderstood or conflict with what you say about startups (maybe even for your sales teams). From one of your previous posts http://blogs.sun.com/jonathan/entry/explaining_our_share_gains
    Quote…
    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.
    End Quote…
    For anybody who hasn’t read the post, I advise reading it as this quote in isolation may give the wrong impression of what Jonathon was saying, but I use it here to illustrate a potential misinterpretation of intent.
    How do you determine if that startup flower shop will become a major online flower delivery service. I can see that you can focus on specific startup services which are clearly online services, but the startup shop that evolves may also remember its first encounter with a company that didn’t seem to be interested. Hopefully they would remember it as good advice at the time, but they may find a competitor who sees and shares the opportunities that would make that business become a global service. These are the opportunities that could significantly change the way Sun is perceived by the smaller organisations, whether it’s that they want to use the servers themselves or that they use that as a measure by which they choose their provider if they choose the Salesforce.com route.

  12. Jonathon, thanks for the link. When I blogged the pricing, I did so with a bit of trepidation. I was worried that Sun might not take kindly to having their pricing thrown out in the open, considering all the gate-keepers I had to go through in order to get that pricing.
    I was hoping that it was because of VARs and channel conflicts that Sun didn’t open the pricing on their own.
    Great move on the pricing, and great move on startup camp. One of your marketing types called me after ‘Camp and spent an hour interviewing me about Sun and Startups. Good idea, and perhaps you’ll want to spend more than an hour on something like this. I’d imagine that Sun has customer advisory boards; do you have a board comprised entirely of startups?

  13. My company is not-quite a startup (founded 6 years ago) so we don’t qualify any more. Speaking of Thumper, whatever happened to the $32K entry-level version with 12TB of storage? I am really interested in migrating our databases to PostgeSQL running on ZFS on a Thumper (as opposed to Oracle on V440 on Fibre Channel RAID arrays), but the new entry ticket of $70K is simply too steep for us.

  14. I am the CTO of a startup that uses 100% sun hardware (x2200 M2 and T1000). Whenever we tell investors (in silicon valley) that we use Suns, they always say that Sun makes slow,expensive and unreliable hardware and that there are much better choices. People have literally been horrified at what they viewed as a VERY poor choice. It does not seem like the startup ecosystem is aware of the vast improvements in Sun’s servers over the past year. I completely agree with other comments about the buying process. It took us 6 months to find a tolerable way to buy (a very good sun reseller). Sun can still never tell us when the hardware will ship (the delivery dates online are completely meaningless) and they usually screw up the delivery (missing components).
    BTW — the power issue is HUGE. Please keep up the improvements in power usage. With a new data center contract in san francisco, you will pay about $120 a month per 100watts a server uses(the data center will say you are paying for space, but really it is power because you can not get anywhere near filling a rack with the power budgets they give racks).

  15. David

    gpl solaris. then i and many of my friends will really pay attention.

  16. Herm

    Sun discovers that the small & medium business market is huge and is the fastest growing in the industry! Oh, and they have special needs!
    This is about the 4th blog post here that seems to be about 2-3 years behind the times. Welcome to small business, I guess.

  17. Hans-Juergen

    Remember what I said: “Doing business without marketing is like waving arms to girls in darkness…”
    I am just returning from a meeting with a hard- and software vendor who invited me to see his company. Well, I had to tell them that SUN has not only big SPARC boxes but cool servers for everybody and my favourite SunRays,which I love so much!
    And your “free” software is useless for small companies because you can’t get it to work without weeks of meetings, proof of concepts and hundreds of SUN technicians working for you. That’s nothing for small budgets. Maybe that’s the reason why so many companies still prefer the “klick and run” of Microsoft with all security problems coming with such an approach. But this is another story.

  18. Kevin Hutchinson

    Why do you need sales people? Dell proved that a good web site with custom order options is all you need. Sometimes I feel like your sales people are getting in the way of your sales.

  19. David

    in addition to my earlier suggestion to gpl solaris (critical to sun’s long-term success imo), i would like to commend all the folks at sun who’ve been making the choices that have led to sun’s recently increasing mind share. it’s only been a few months since sun’s hardware and software has appeared on my radar as potent solutions for my clients. and the reason i’m noticing sun now is due to the long term decision making that sun’s been engaged in in the last few years.

    here’s the trick – don’t stop. don’t lose your nerve. don’t start making short term decisions.

    “Short term decisions tend to fail in the long term.”
    — Frank Herbert

    keep embracing the free software community (who are taking notice) and keep embracing transparency and it will pay off in the long run.

    if you stay on track i’ll soon be recommending sun hardware.

    finally, to all the chicken littles squawking about monetization, “do what you love, the money will follow”.

  20. (it’s like on of those age old government organizations forced to privatize – they just won’t adapt no matter the effort of the executives)

    Hi Jonathan

    I’m quite bit biased regarding Sun.

    On one hand I’m completely thrilled and ready to join a Sun cult (if so exists).
    I guess this “hand”, my personal side, is overwhelmed by all the great visions that you seem to drive into Sun.
    And my professional “hand”, my working as a System Administrator, that enjoys the spectacular hardware (not to mention Solaris 10) that’s absolutely amazing from a performance/quality/space point of view.

    But on the other side I feel let down to the extreme by the slowness ignorance presented to my by the Sun organization. You have the product but just don’t bother selling it.
    I’m not able to tell whether this is a general issue (my bad experiences are with Sun in Denmark). But judging from similar posts I take it that it’s about time you get your troops in line if you ever expect to monetize the huge efforts put into making this amazing hardware.

    I’m not sure whether I regret turning to Sun.
    But I definitely would have reconsidered if I knew then what I now do, when the decision was made.
    We are now a year behind schedule implementing the system.
    First of all it was close to impossible to get a hand on the system.
    It looks like others too have written; that Sun just don’t bother with companies that aren’t among the top 100 (we definitely aren’t since we started off with only two T2000 expecting to buy another 5 in the next 6 months) in the specific country.
    At the end I was almost lying on my knees begging to buy your stuff.

    But the worst part of how we were treated afterwards.
    Sun was well aware of our time schedule and that we expected them to provide technicians to help us.
    Still though it took them months after the delivery to actually tell us that they couldn’t find any technicians and that we would have to manage ourselves. Thanks, great working with you, love you too!.

    At some point later on we needed urgent support with a certain issue.
    Contact was made and the people in question were explained the situation and how urgently we needed their support.
    After 5(!) weeks of endless put offs a technician finally called. Sadly he didn’t really know much about the issue.
    This is the kind of things that could very well have led to the death of our company.
    Now I know that Sun is nowhere to trust and that nothing critical should ever be relying on them.
    The hardware is great but you have to initiate contact half a year in advance in order to be sure you actually receive anything in time.
    And don’t ever make any arrangements with them since they are definitely to let you down first chance they get.

    I still need Sun’s hardware so I have to continue dealing with them.
    I might actually succeed in future without jeopardizing the company now knowing how to deal with Sun (never expect anything and always assume that they will not deliver whatever promised)

    This is a sad story indeed (from a personal viewpoint it’s even worse since I personally participated in reference interviews and spoke on conferences for that particular Sun organization, explaining why I was so thrilled about them – before knowing how they screwed us. In retrospect that that actually makes me really angry!).

    Your exceptional hardware would batter your competitors to the ground, if it wasn’t for the above mentioned self destructive behaviour (and if you actually used just a small amount of money on marketing so other potentials than a small margin would know about your features).

    Best of luck

    Mikkel Christensen

  21. Cheryl V. Woltemate

    I think Sun needs to do more advertizing, too. Solaris is a huge success story. But people don’t understand the advantages. Sun has not done a good job of pointing that out to the average consumer. The product line is stronger than ever, the prices are more competitive than ever, and Solaris has always been an advantage over Windows. I’d like to see billboards around town playing off the unreliability of Windows. I don’t think it’s a cheap shot–it’s the truth!

  22. I just hope the globalization of this program can reach countries like Brazil. And other so called “in development” countries.
    We have real problems with bureocracy and taxes, but if we could buy hardware for half it costs today, I’m sure the market would be the double it currently is.

  23. Christopher Mahan

    To David: right on.
    To Jonathan: What happened to your $795 servers?
    I would add that if you want to hit the startups, the real ones, you need to be attractive as an option to the 14 year old in the basement, which means making a machine that can run at home. (not loud, not mounted on a 19 inch rack.) and it’s got to be inexpensive, and run Solaris 10 as well as linux.
    Get people using your hardware when they are forming, and if they like it, they will be customers for life. (ask apple)

  24. Well, first of all, an appreciation on behalf of my company for such a wonderful blog, this is certainly a very interactive as well as a informative blog. Thanks for contributing your thoughts with us.

  25. Dmitri Trembovetski

    which means making a machine that can run at home. (not loud, not mounted on a 19 inch rack.) and it’s got to be inexpensive, and run Solaris 10 as well as linux.
    You mean, like these?
    http://www.sun.com/desktop/index.jsp

    They’re also discounted for startups:
    http://kalsey.com/2006/11/sun_startup_essentials_pricing

    Dmitri

  26. Jonathan David

    Alright Jonathan..
    My last server purchase was for a quad CPU Intel box that runs Redhat for use with Cadence IC design software.
    Can you give me comparable performance running that software on solaris? I don’t think Cadence supports Solaris OS on x86 or
    opteron processors.. which’d mean the OS would have to be compatible with RH EL3.0
    I’ll be glad to take a sample system for a test.
    but not until after the Holiday’s..

  27. Jonathan, Great post. I’m a system administrator at a major University. I have been a fan of Solaris and Sun Hardware for many years. However, I always felt like Sun was not interested in talking to me unless I have over half million dollars to spend. Less than two years ago I had a grant for $117,000 to purchase a Cluster, I went to Sun. Much to my surprise they were very interested in making a sale. So with much discussion about our challenges in research, my feeling was nobody had a clear picture of what the cluster should look like. So I went to Dell. Dell went to there HPC center and they came back with a HPC design that had twice as many nodes and I think four times the storage for the same price. So I sent an email to the Sun Sales exec and told him what Dell had offered He kindly replied that Sun was no longer interested. Long story short, less than year later our department purchased two more clusters from Dell and begun to weed out Sun servers and Solaris. Oh yeah, we probably have spent over half million dollars on competition and will likely spend another half million on your competition this year. I don’t say this to rub it in, because I am still a fan of what Sun is doing , I say this because hope things really do change at Sun.

  28. UX-admin

    The situation in Europe is definitely BAD.
    Sun has fallen out of favor and Sun sales people are doing a lot of damage to Sun reputation and sales. Unless you’re a big bank or an insurance company they won’t bother with you.
    I was at the local Sun site for Solaris 10 training recently, and my hairs stood up on my head when I saw *ALL* the staff using WINDOWS XP on their PCs and laptops!
    For a company preaching “eating their own dog food” this leaves a very bad impression in customer’s eyes! Very bad!
    Also the “discount program for startups” is United States only.
    This must change. Yesterday!

  29. Jeremy Chappell

    If you’re really serious about this (and who knows, perhaps you are) you’ve forgotten a few things.
    Sun make great “big stuff” computers, the water company if you like – but most people only see taps. Taps are where the people think the action is – that’s where the water comes out.
    To stick to my analogy – the PC is the tap, and we’ve got really lousy taps.
    Sun need to get serious about solving the small problems, and really start to understand that “fit and finish” is important.
    OK, the small problems? That’s the computer on (or under) my desk, the receptionist’s desk. Today it’s a war zone, and not one where we’re winning. Viruses, Spyware, all kinds of nasty stuff is “in the water supply”. So I need a computer that doesn’t have that happen. Microsoft isn’t going to do it, and I don’t see the AntiVirus stuff doing a good job either (usually just slows the system to a crawl, and gives a false sense of security).
    But small companies have another huge problem: software. Not getting it, that’s easy to be sure, you can buy Microsoft’s Office, or use OpenOffice.org (which is actually just as good for most needs). No it’s the stuff you need to build, often it’s not even rocket science. But actually building this stuff is too hard.
    Now I know, you’re going to say “Java”, and sure I do “Java” (if Java is a verb – and for me it has been a while). But building GUIs in Java is painful, and it’s not “noob-friendly”.
    OK, all this negativity right? What comes closest to this? The Mac does, Objective-C is nice (and V2 looks nicer) and InterfaceBuilder is great. But Apple’s focus isn’t really on the small business (or even business). The database connectivity story is confused, WebObjects seems to have “interesting times” ahead of it (in the Chinese curse way) and it look more and more like a great way to buy stuff for your iPod. For consumers – it’s great.
    Now Sun worked with NeXT “back in the say” on OpenStep, which morphed into Apple’s Cocoa – where is all this technology? Maybe time to dust it off and create the computer for under my desk? ‘Cos you know I need better taps.

  30. Prince

    Andre ,
    I heard Dell systems are very hot and your savings V/s Sun systems might
    evaporate with cost of energy bill ?

  31. Rajeev S

    Hi Jonathan,
    Next time you have a rif, fire your entire marketing team. Your engineers do a better job of selling sun products. I am a keen Sun fan and I think the innovative products in both hardware and solaris-os over the last one year has done you a lot of good. But if microsoft or google or apple or even ibm had created the T-2000 or zfs they would have been the industries’ biggest buzz words. It’s time that you completely revamp your marketing/sales strategy the way you have revamped the solaris 10 operating system.

  32. Paul

    Could you please comment on the “isn’t free”, “is free”, “isn’t free” pricing of Sun Ray and Secure Global Desktop. It certainly isn’t following your statement about all software being free and only paying for support when you need it. I don’t see much “commitment” here.

  33. Prince

    Hi Jonathan, As a share holder it is worrying to note that smaller businesses are not getting that much attention from sales. Having great products alone is not sufficient. Sun needs to fire on all cylinders. Sun still has the image ‘Makes big slow iron’ , although it is beginning to change.

  34. Chris Mahan

    Dmitri,
    Too expensive. Last PC I bought for my house (last year this time) Compaq amd64 3200 + 512 ram + 200GB hd + dvd rw. Price? $350
    Remember, you need level-entry. This means a great machine under $500.
    If I’m going to spend 2 grand, I’ll buy a T61p

  35. It is a great initiative! Look forward to you making it available in Australia.

  36. I too am interested in the “Freeness” quotient, I suppose, of the Secure Global Desktop software (and also the Sun Ray server software) — as a Uni Student and a part-time independent IT consultant I place a lot of value on the ability to run Sun’s software stack in my own test and experimental environments without jumping through licensing hoops. Licensing hoops are for Sun’s competitors!
    I look to implement Sun’s software wherever I can find an appropriate deployment scenario, but I must say it’s a bit harder for me to play with the SGD software when the main free-sans-support option appears to be a time-limited evaluation. To extend this evaluation I appear to have to apply by e-mail and specify an arbitrary evaluation user- and time- limit.
    I understand there may be some transitional differences from the Tarantella rebranding and what have you, but it would be terrific if the terms were as free and as openly obtainable as the rest of Sun’s software stack.

  37. Arjun Rathore

    Looks like Sun is keeping all options open and venturing into different areas. Keep it up. Sun can do even more to be the center of action for the startups. How? Well, startups are short on funding and as you said many start in the garage. If Sun can provide a virtual workplace/office with the requisite hardware/software hosting, communication tools, tight security, etc. more startups will flock to Sun ( rent it out to the startups). Sun can be the incubator ( from the hardware/software perspective) and encourage birth of more startups. No need to ship servers, you can host their virtual office.

  38. Jonathan Schwartz (SUN CEO) says the sales of the new 8-core server Niagara T2000 are growing fast. 8-core means 8 processors packed in the body of one. He says that a brand new 25.000 USD Niagara server can blow out an ‘old’ system of 250.000 USD value.
    He points to an interesting phenomenon in the computer marketplace: if you double the performance of a machine, customers don’t buy half as many, they tend to double their order. Moore’s Law and free software drive relative pricing down, and customers accelerate their growth.
    Moore Law and free software.
    In my world of software made for designers and engineers each ‘core’ runs one software licence. N-core processor = N software licences.
    The most of my peers didn’t revise the price of their multi-core software licenses. 8-core replacing an ‘old’ 2-core brings a 4x investment in software licenses.
    I wonder if Computer Aided Engineering companies would get growth and profits revising their multicore licenses price policy.
    “Putting a price on innovation is an art, not a science.”

  39. Charles Tutt

    OK, I’m one of those entities much more likely to spend $2500 (or even less) than $250K at a time. Let me tell you about my most recent experience with Sun. On 9/26 I ordered a pack of 25 “smart cards” from store.sun.com for a price of $115. I was a bit shocked at the checkout to see that shipping charges were $31.20, particularly since such a small item would probably easily fit in a Priority Mail $4 envelope, but I wanted the cards and hadn’t had much luck shopping around for for them, so I submitted the order, prepaid on my MasterCard. Shortly thereafter I got an order acknowledgement postmarked 10/4 which indicated a planned ship date of 10/6. Then I got another, postmarked 10/9, indicating a planned ship date of 10/20. Then yet another, postmarked 10/23, showing planned shipment on 10/26. As you may have guessed, that wasn’t the final word. I got yet another, this time postmarked 10/31, with “planned” shipment on 10/27 (back in time, apparently). Another piece of mail came about that same time — an invoice postmarked 10/30, and showing a shipment date of 10/26. And the cards finally did arrive, despite having been shipped the slowest way available.
    Maybe somebody who can order a quarter of a million dollars worth at a time can put up with this kind of “service,” or maybe you treat them better, but I found the whole experience quite offputting. And I’m a shareholder, which only makes it worse.
    Newegg treats me much better. You could take some lessons from them (and probably many others).

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