Sun Cuts More

Looks like Sun is cutting more jobs again.

According to a Securities and Exchange Commission regulatory filing completed earlier in the week, Sun Microsystems plans to make job cuts while undergoing a restructuring plan. The company will spend from $100 million up to $150 million over the next few quarters while eliminating more jobs.

The company already cut around 3,700 positions with layoffs and attrition after Jonathan Schwartz took over as CEO — a number smaller than expected by analysts at the time. Sun still employs almost 34,000 people worldwide.

Wall St. loves job cuts, but as a technology customer, cuts generally turn me off to vendors. Unfortunately, Sun’s troubles are much deeper than having too many people. Sun develops some interesting technologies that make very little money.

The biggest cash cow for Sun in their hardware, which most companies will not buy. Sun survives on legacy customers. There are a variety of reasons why companies won’t even consider Sun. A lot of former Sun shops had really bad experiences, and wont even let a Sun rep set a foot in the door. The other big reason Sun hardware is having trouble is price, or in some cases the false perception of price. Companies won’t touch Sun hardware because it has a reputation of ripoff pricing. The reputation is justified, but today there are a lot of Sun configurations that are competitively priced.

Where Sun really completely missed the boat is Linux. Sun spent way too much time trying to push Solaris and fight Linux, when it should have adopted Linux. Sun’s outlook would be completely different today if it adopted Linux in the mid-late 90’s. If this was 2001, I would say Sun should just go out and buy Redhat, but now SUN can’t even afford to do that.

At this point, Sun can’t even make the switch to Linux if it they wanted. They already dug the hole a lot deeper with investing more into Solaris. As a UNIX fan, I like OpenSolaris. It has a lot of good features, but from a business perspective its stupid.

Sun is not going to make more money improving Solaris. Not enough companies are going to run out and adopt Solaris, and buy Sun hardware because of some feature in OpenSolaris. It might keep legacy customers happy, but Solaris is not going to attract enough new Sun hardware customers to validate Sun’s strategy.