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Business columns: How Sun Microsystems lost its way
Sun Microsystems has been drifting for years, unable to decide whether its future lies in high-end or low-end servers, said<strong> </strong>Therese Poletti in<em> Marketwatch.com.</em>
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herese Poletti
Marketwatch.com

Poor Sun Microsystems, said Therese Poletti. It never regained its footing after the recession of 2001, and another recession now jeopardizes its fragile comeback. Sun has been drifting for years, unable to decide whether its future lies in high-end servers built around its proprietary SPARC microprocessor or in “lower-cost servers developed around commodity chips from Intel.” Had it focused on the high end, “Sun could have been the Apple Inc. for corporate customers,” selling its “well-engineered, reliable servers” to corporations happy to pay top dollar for reliability. But Sun has also poured resources into low-end servers, in a bid to capitalize on “the new penchant for lower-cost systems running free software.” This “two-pronged strategy” has created confusion for Sun’s customers without winning it a leadership spot in either market. Now investors are running out of patience. Mason Hawkins, whose Longleaf Partners Fund is Sun’s largest institutional shareholder, is talking to Sun management about “opportunities to maximize” the company’s value. Translation: Hawkins wants Sun to find a merger partner. He might not get his wish, but unless Sun makes “serious changes,” it will “continue in its downward spiral.”

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