The Register on Sun: whats a company to do?

A good read over at the Register on the trials and tribulations at Sun. Yeah, I know, shortly after I post this, our sites are gonna get DDoSed. Seems to happen all the time (any post that doesn’t paint Sun as a glowing ball of hot plasma … seems to disagree with some groups out there).
The basic premise is that Sun is in the not so enviable position of its valuation being approximately equal to its pile of cash. Which means that investors don’t necessarily see value in the company beyond the cash.
Hey, I’ve been there before. Used to work at SGI for a while, when we were valued below our pile-o-cash (1999-2000 ish). That says something (quite demoralizing) to people working there.

The article speculates on what will happen, and draws similar conclusions to what I have in this blog in the past. Sun has to decide what it is, aim for that, and cut everything else. Its painful if you are there, and your project is one that gets cut.
Or Sun can emulate the SGI of old, and in early 2001 … January as I remember, cut its linux cluster business to zero in order to appease an executive (who was thankfully escorted out right after the bankruptcy that he managed to help create). Yeah, SGI did indeed exit the linux cluster business for the first time in 2001. Right before it took off explosively. SGI couldn’t bear to let its gems go … it desperately wanted to be a big iron, a heavy metal shop. None of these pesky commodity class hardware machines for it. Talk about an albatross. Or anchor about a neck. Use the metaphor that is most appropriate for the imagery of a company choosing what it is comfortable with versus what it needs to choose.
Sun is in this position. It has multiple albatross’ or anchors. It doesn’t want to admit it. Sun execs, if this article ever gets to you, don’t make the same mistakes as SGI made here, choosing comfort over need. That obviously did not work out well for them, and it won’t for you either.
Part of the job is recognizing what battles are still winnable, and closing down the battles that aren’t. I have my opinions on this, but since Sun hasn’t bought my company, and/or hired us to render them, I’ll largely keep these to myself.
Note that this is hard. It is not easy to make a tough call. It takes guts, and the ability to deal with very upset partisans. But these decisions either have to be made, or Sun will follow SGI’s model.
That would not be a good thing for Sun or its stockholders.
My major recommendation for execs that can’t stand the thought of shutting down products/projects is to spin them out. Make them stand on their own. You would be surprised what happens then.
[update] I urge people to read the Innovators’ Dilemma by Clayton Christensen. Basically every few years, something comes along and creatively destroys a market/product line/offering. Its understanding this, deciding what will survive (as in what will be likely to survive) and what will not that is essential. This is often very very hard for senior execs with lots of time/effort/people invested into specific product lines and business units. Sometimes it helps to hire an outsider to make the tough calls, and then execute them.
SGI had this as a problem. It made some tough calls early on, but never actually executed them. Management became a pitched battleground between SGI and Cray forces. Cray eventually won out (SGIers often refer to this as the takeover of SGI by Cray).
This was not good for either company. Products that should have been killed were not. Products that should have been invested in were not. I remember TJ, at the 1996 sales meeting noting how the SGI Challenge S (basically a warmed over Indy w/o graphics) turned out to be spectacularly good at serving web pages. But SGI never followed that train to its conclusion.
Most SGIers deride the efforts going into the PC market in 98/99 as mistaken. They are wrong. That should have been the direction we went, the writing was clearly on the wall, and the company misread it.
Someone basically ate our lunch. And dinner. And breakfast. Because our execs couldn’t let go of their albatrosses. Their boat anchors were comfortable.
What I learned during this time was how to attack and beat a company in some of its core markets by identifying its albatross, and building a better faster cheaper version. JackRabbit is an example of this. Not falling victim to our own success in this product, we need to continue to innovate and drive the better cheaper faster mantra. Our very shortly forthcoming ΔV is precisely this.
Looking forward at the HPC and cluster computing market, I see definite trends, and our discussions with customers strongly re-inforce these perceptions. People (not the high end ORNL/NCSA class HPC consumers) want better cheaper faster. Everything else is an albatross.