The History of Sun Microsystems
The history of Sun Microsystems reveals how important
innovation and flexibility are to the success of a company. Innovation allowed Sun to build a company
capable of taking the lead in its marker within the first few years of its
incorporation and continue to grow dramatically. More importantly, Sun's flexibility and a
willingness to adapt to changing environments enabled them to survive the
bursting of the dot-com bubble that bankrupted so many tech companies. And both these traits - innovation and
flexibility - allowed them to bounce back and recapture an influential presence
in computer world.
Sun was incorporated in February 1982 with only four
employees. For the next ten years, the
company was mainly a hardware vendor selling workstations, but they did that
single task quite well. They sold 68000
processor-based workstations running the Unix operating system, and using
TCP/IP (now known as the Internet Protocol) at a relatively low cost. Five years later, they were winning the
Workstation Wars of the 1980s and took the lead in the market. They maintained this lead into the early
1990s, when they expanded to servers.
The dot-com bubble of the 1990s led to booming business
and dramatic growth for Sun
Microsystems. New dot-com
companies were starting up everywhere, creating a demand for expensive
Sun-based server systems to handle high levels of web traffic. When the dot-com bubble burst in 2001,
however, it hit Sun hard. Sales for
hardware, Sun's primary market, dropped dramatically. No new dot-com companies were starting up and
needing new equipment. Existing startup
companies didn't need to upgrade their servers - when web traffic failed to
meet their expectations, their existing high-end Sun servers could handle the
existing load quite well. And as the
dot-coms began to go out of business, their equipment was auctioned off, and
suddenly companies needing high-end Sun servers could acquire them at a much
lower cost than Sun was offering.
Finally, Sun was also facing competition from a new server farm strategy
that used larger numbers of small, cheap servers running open-source operating
systems (primarily Linux) instead of the traditional strategy of small number
of expensive, high-end servers like the ones Sun produced. As a result of all these factors, Sun
experienced several quarters of steady losses, their stock fell to less than a
tenth of its peak value, and Sun was forced to close manufacturing plants and
lay off employees.
In addition to massive cost-reduction efforts, Sun
managed to weather the recession through flexibility, adopting its competitor's
strategies and diversification of it products.
Sun developed a powerful but low-cost 64-bit system to compete in the
low-end server market. They began to
compete in the open-source world by donating 1,600 patents to the global open
source community in 2005. Currently, Sun
offers an open-source office suite (StarOffice and OpenOffice), an open-source
version of Solaris (OpenSolaris), and turned their powerful platform Java
system into an open-source project. Finally, they began to diversify their
business away from mainly hardware and are competing in the 'Software as a
Service' Market. In 2005, they expanded
their 3000-CPU server farm used for research and development, and made it
available for commercial use, selling processing hours and storage at
affordable prices.
Today, Sun Microsystems retains an influential presence
in the computing world. Their history
demonstrates the importance of innovation and flexibility to a company. Innovation allowed Sun to grow quickly and
dominates their market. Their
flexibility with their products and willingness to adapt to a changing economic
environment allowed them to survive a recession. And both qualities allowed them to bounce
back and stay ahead of the volatile and ever-changing tech market.
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About the Author
Tom Kranz runs a Unix Consulting business, as well as a help site for users of Silicon Graphics computers. He specialise in Solaris consultancy and larger scale infrastructure solutions.