I thought I’d share a note I sent earlier in the week to Sun’s leaders – about the turmoil we’re seeing in the markets, and how I want our team focusing their efforts.
Begin forwarded message:
From: Jonathan Schwartz
Date: September 30, 2008 12:02:29 AM PDT
To: All Sun
Subject: Headlines, Financial Crisis, etc.
You can’t have missed today’s headlines – the American Congress failed to pass a critical bill authorizing the Treasury to put a floor under the US banking sector. The market swooned, and politicians in the US, and across the world, are bickering over the right long term answer – jump in and take action to save the troubled institutions, or step aside and let the market sort it out. Several more banks/insurers were shuttered or bailed out today – I’m confident we haven’t seen the last of these collapses and rescues.
And I know there are questions about “how does this affect Sun?” Well, I believe almost all our core customers will be affected – not just the banks, but the telcos, hospitals, media companies, construction firms, airlines, governments, startups, you name it. Every customer that depends upon credit as a means of financing their business – whether it’s a university or a Fortune 100 transportation company – is going to be under severe stress.
It’s also going to create a huge opportunity – if we’re on offense. Not on defense, not worried about the impact on Sun, but driving the outcomes for Sun’s customers and shareholders.
And here are a few important things to remember.
1. Our customers look to technology as a means of driving value and productivity.
You’re not going to hear from any of our customers, “let’s stop buying technology and hire more people to do the work.” They’re going to default to the opposite – automating work, and finding answers and opportunities with technology, not headcount. And in that process lies an opportunity for Sun – to engage with customers in driving down cost, driving up utilization, and driving the changes that yield immediate and long term benefit. The right question for every customer you meet is – “how can I help?” I assure you, they’ll have ideas for us. And we have no shortage of ideas for them. Personally, I’m reaching out to customers and partners just to check in and offer help – I’d recommend you do the same.
2. That said, we are aggressively expanding our customer base.
Our concentration in financial services and telecommunications is exactly why we’re working so hard to expand our customer base. We’re dramatically underpenetrated in the global market – and that represents a great opportunity. I need every executive to think seriously, esp. in the market-facing portions of the organization, about growing our current relationships and growing new customers. The ‘and’ is important – growth matters in both contexts.
And why do I think we have permission to grow new customers?
3. Because innovation loves a crisis.
Remember the bursting of the internet bubble? The initial wave of open source adoption followed that collapse some six or seven years ago. That same zeal for breakthrough, game changing economics is back with a vengeance – and this time, Sun’s positioned as the single biggest potential beneficiary. Want proof? As companies move to lower the cost of proprietary database vendors, their number one choice is: MySQL. The number one choice to lower spending on proprietary storage: ZFS with OpenStorage. How will the proprietary alternatives fare against xVM? Glassfish? Lustre? OpenSolaris? Same, from where I sit. There’s opportunity everywhere I look.
We can, and should, be on offense across the board. From our newest Batoka and M-Series SPARC systems, to our newest Constellation Intel and AMD blades, from our network identity offerings (talk about automating labor-intensive processes!) to leveraging our amazing SunRay thin clients, or our PS and Support Services capabilities – we have the most powerful offers we’ve had in years. Imagine if our portfolio had been this strong when the dot com bubble burst – we’d have swept the floor, and been in a dramatically different spot.
Which is all to say, there will be no end of opinions surrounding what the US, or the EU, or the Asian governments should be doing to bolster economic performance. I’m not that interested in the public debate – I am infinitely more interested in the private debate – going on inside every one of our customers surrounding “which OS will we pick?” “What’s my open source strategy?” “How can I radically reduce spending on proprietary storage?” “How can I save on power and space?” Which vendor understands my problems?” “Which vendors are asking if they can help – which are truly my partners?”
In times of crisis, we have a big opportunity to stand apart from our peers, to be better connected to the market, even if it’s in turmoil. Yes, our customers are going to be under stress, but that’s simply another way of saying “open to change.” And I want Sun to be the company engaging them in the transition – with our ideas and our roadmaps. The door is open.
And yes, we will see some customers disappear – we will also see many emerge even stronger. And the market, as it’s done for the past 30 years, will return to growth – led by the companies that took advantage of the downturn to become even more valuable, to grow even faster.
So I want to assure you, we are watching the market very carefully, to understand the impact on Sun, and the challenges in front of us – on a macro and micro level. But I and my leadership team know the drill, we’ve seen this before when the last bubble burst – *now is the time* to get in front of the opportunity, and firmly establish new ground. Now’s the time our customers will be most open to change.
Let’s be sure we’re there to help – and to take advantage of the opportunity.