Matt Asay & Larry Dignan question whether Sun can grow. Matt believes that Sun needs a stronger software story in order to grow. Sun grew 1% YTY in the most recent quarter. Yay for open sourcing everything?!?
Sun has great hardware products. Their main revenue generating software successes have come from software that is tightly linked to driving more hardware sales. Solaris and Sun’s storage software are examples of this point. Like Sun, HP has great hardware products. Sure, HP does some software, but at the end of the day, the software (like OpenView) is tightly linked to driving more hardware sales. Sun is more like HP than its willing to accept just yet.
Sun’s revenues are over $3B a quarter (~$14B for the year). Sun would need an additional $300M/quarter of software business to show 10% growth. Even if Sun swallowed Red Hat tomorrow, Red Hat’s ~$500M in revenue would result in 3.4% revenue growth for Sun. One could argue that additional software could drive additional server revenue for Sun. It could, but customers have decoupled their software and server purchase decisions years ago, so there is no guarantee.
The future for Sun isn’t in a stronger software story. Sun has never had a strong software story. While open sourcing everything makes for great PR, OSS hasn’t and won’t drive significant (near or long term) revenue for Sun. Do the math…sorry, it had to be said.
The best advice for Sun is to focus on what they’re good at. Servers and storage.