Sun's Next Move (SUNW)(IBM)(HPQ)(DELL)(NOVL)MSFT)
Sun has decided to make its software platform, Java, open source, not unlike the Linux OS that is marketed by Novell and Redhat. Microsoft recently teamed with Novell to distribute Windows with the Suse version of Linux.
Sun's argument for making Java open source is that it will be more attractive to customers and programmers. But, being free does not always drive adoption. There is a reason that Microsoft still owns the operating system business worldwide. Linux is free, but without a development path lead by one company, the software based can be hard to manage.
One thing that is for certain is that the market does not care. Sun's stock was up 1% on the news. The stock has been trading in a narrow range just above $5 for the last two months.
The market already senses that Sun's moves on software will not save the company. Sun has already open sourced its Solaris software, and the results have been hard to guage.
Sun is a server company, plain and simple. It recent growth has not been organic. It has come from the acquisitions of SeeBeyond and StorageTek. While this is not necessarily bad, it begs the question of what will happen to Sun's revenue next year when the comparisons include all of the acquired revenue.
Sun's new Niagara chip has gotten solid reviews and could help drive that company's core server operations.
But, for Sun's better server products to gain share, they have to get by offerings from Hewlett-Packard, IBM, and Dell first. They are larger companies that Sun and they will not make it an easy passage.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
Sun's argument for making Java open source is that it will be more attractive to customers and programmers. But, being free does not always drive adoption. There is a reason that Microsoft still owns the operating system business worldwide. Linux is free, but without a development path lead by one company, the software based can be hard to manage.
One thing that is for certain is that the market does not care. Sun's stock was up 1% on the news. The stock has been trading in a narrow range just above $5 for the last two months.
The market already senses that Sun's moves on software will not save the company. Sun has already open sourced its Solaris software, and the results have been hard to guage.
Sun is a server company, plain and simple. It recent growth has not been organic. It has come from the acquisitions of SeeBeyond and StorageTek. While this is not necessarily bad, it begs the question of what will happen to Sun's revenue next year when the comparisons include all of the acquired revenue.
Sun's new Niagara chip has gotten solid reviews and could help drive that company's core server operations.
But, for Sun's better server products to gain share, they have to get by offerings from Hewlett-Packard, IBM, and Dell first. They are larger companies that Sun and they will not make it an easy passage.
Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.
posted by douglas mcintyre at 12:32 PM
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