I would be very, very interested to learn more about the numbers concerning what they're doing. I'm pretty convinced at this point that service is just a bad way of making money for a company, long term. Support might be a little better, but you have to be pretty sure that they're paying more than they're demanding of your time, which seems like a more difficult calculation than simply selling a product.
Actually, as someone who really loves open source, I'm thinking the model that's most interesting right now is the google/37signals strategy of using lots of OS, and contributing back to it, and making money with the 'tip of the iceberg' that you keep proprietary. Who knows, though... it's still something that's too new to know how it will all work out.
Good article. I agree that Sun is coming back strong. I've got a Sun Fire x4100M2 on the way as part of their Try and Buy program. When you join the Startup Essentials program the prices can be lower than Dell's for better equipped hardware.
Coming back strong relative to dying perhaps. Sun is still in the business of significant overcharging. Their history of selling things at 1000%+ markup is hard to give up.
I've overseen the purchase of millions of dollars in server gear over the past few years and frequently had Sun quote me a price. The closest they've ever come to beating Dell, Rackable, or my no-name suppliers is trying to sell me other customers canceled orders. Buying Sun's stuff is like buying Apple's server gear: not the best use of your money.
They're super generous on eval hardware and trying to lure you in. They still have cut throat sales guys who will try to screw you in various high profit margin ways for the sake of their commissions. Dell sales is all business, efficient, and totally straight forward.
If Sun went out of business tomorrow the Open Source world would barley notice. I like Jonathan Schwartz, but that's the reality. He should split the company in half, one half to clone Red Hat's model and one to be the The Old Sun and milk the legacy cash cow.
Good post, and I'm definitely familiar with pushy hardware sales dudes.
Given all that though, my previous post still stands. The prices I'm quoted as part of the Startup Essentials program are lower than Dell's. I'm looking at a few web servers, a DB server, and a storage unit and it's coming in at 85% of the Dell cost. The servers seems a bit nicer too in the components (CPU speed, number of RAM slots, etc.)
Check Silicon Mechanics, Rackable.com, or just forward Dell your Sun quote and have them beat it if you want. For a small amount of gear though it doesn't really matter much. I'm certainly not saying Sun makes bad stuff either (they do overstate their differentiation though), just that they charge a premium like Apple does.
To sort of half quote Schwartz: Their current revenue is a lagging indicator of previous success. Who buys Sun these days? From what I can see it's basically governments and other big institutions. Organizations that are very slow to change but spend billions. When they finally do move to commodity vendors Sun will be either dead or a totally new company. Schwartz knows this and that's why he's trying to make sure it's the latter.
Actually, as someone who really loves open source, I'm thinking the model that's most interesting right now is the google/37signals strategy of using lots of OS, and contributing back to it, and making money with the 'tip of the iceberg' that you keep proprietary. Who knows, though... it's still something that's too new to know how it will all work out.