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Revenue and Profits Down At Sun

04.29.2009
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The New York Times reports that Sun's revenues and profits have plunged, perhaps as a result of the uncertainty over the future of the company. After Oracle's acquisition of Sun, due to complete during the summer, Oracle may be wondering if they've made the right choice. 

The first quarter of this year has seen a $201 million net loss from Sun, which works out at about 27cents a share. This really underlines the current economic situation and questions Sun's business model - this time last year the loss was at $34 million - not bad compared to the new figures. Sun's revenue is taking a beating too, down 20% to $2.6 billion.

It should be expected that sales would be down at the moment, as a lot of companies aren't willing to spend on computing infrastructure.  Either way, analysts insist that the results are worse than expected. 

The numbers were worse than analysts expected, which some of them see as a sign that uncertainty about Sun's future may have led customers to stop buying in the closing days of the quarter. "There is certainly potential for that," said Bill Kreher, an analyst at Edward Jones.

Sun is always going to be vulnerable from hardware, but there is a bright side to the news. On the software part of the business, billings from Java have risen 27% during the quarter, which equates to $73 million. MySQL database billings made $80 million in the same time. Does this indicate that Sun has (or had) a viable business model on the software side, particularly with Java?

 

 

References
Reference: http://www.nytimes.com/2009/04/29/technology/companies/29sun.html
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Comments

Andrew McVeigh replied on Wed, 2009/04/29 - 5:52am

i think sun always had a viable software model based around java and licensing. trouble is, the WORA side of Java always worked against their hardware side. particularly because Java runs so well on Windows and Linux, there's no need for the expensive sun/sparc hardware.

i think sun in many ways is (has been?) a very noble company. it gave a huge amount to the community, and seemed to be very solid in engineering. it's a shame it wasn't able to manage the strategy for the hardware side to remain commercially independent.

RIchard replied on Wed, 2009/04/29 - 8:44am

Sun stubbornly insisted on remaining a hardware company long after the spark was gone. At this point Java adoption may be threatened if Sun doesn't start granting the compatibility kit to forks (like Apache Harmony). No one wants to spend millions building an infrastructure on top of a platform that's progress is married to a single entity anymore.

It's a little sad that they've chosen to conduct themselves in such a petty way when it came to "opening" Java.  

 

 

Bob Smith replied on Wed, 2009/04/29 - 9:00am

@Richard

Apache Harmony is just a cheap IBM trick to attempt to wrest control of Java from Sun.   It failed miserably when Sun GPL'd Java so that the source could not be integrated into Harmony.   Apache is not an altruistic organization formed of developers donating code off hours.  It's financed and draws developers from large companies such as IBM that have their own agendas, good and bad.

 

Osvaldo Doederlein replied on Wed, 2009/04/29 - 9:32am

In a quarter where even Microsoft's amazing cash printer failed, with revenue down for the first time ever in that company's history and earnings down 32%, I think it's really unfair to read too much in these Sun results.

RIchard replied on Wed, 2009/04/29 - 10:27am in response to: Bob Smith

Still, the point remains the same. If the control of Java is governed by the compatibility kit, which is controlled by Sun.. Then Sun would be able to retain the integrity of the trademark while placing Java in the hands of an organization that may reach beyond the confines of Suns internal talent pool (the collaborative development model). Receiving funding from sources such as IBM in it's self is not as much of an issue, as the level of control it exerts over the policies of the organization. I'm all for maintaining interoperability between JVMs, but I just can't see how keeping Java semi proprietary helps the community or adoption of the platform at all?

 

Bob Smith replied on Wed, 2009/04/29 - 10:40am

@Richard

Well, Sun made the "Write Once, Run Anywhere" promise, a promise not easily broken.  Granted, Java doesn't run perfectly from platform to platform, but Sun has made a very noble effort with this goal in mind.   With multiple forks, that promise becomes severely compromised.   The TCK doesn't in of itself guarantee perfect compliance.  Different JVMs have leeway to implement certain aspects of the Java runtime differently, and different JVMs do.   The list is manageable now, since it only includes the IBM JDK, Oracle/BAE JDK, Apple JDK, FreeBSD JDK and IcedTea (proof that Java does approve other open source implementations).   Once the list grows, at what point can you say with reasonable confidence that you're running "Java" ?

Besides, how does limiting the number of Java forks limit adoption?  You could argue that Java is everywhere, since it's in mobile devices and now on multiple Linux distros.   

RIchard replied on Wed, 2009/04/29 - 5:00pm in response to: Bob Smith

@WordWarrior

I need to do some research on this matter, for now I'm really confused :) . Don't get me wrong here, I'm not affiliated with the Harmony project at all, I'm just an OSS advocate and staunchly opposed to Software/Idea patents.

1. I knew IBM already had a JVM (so did Borland back in the day remember them :-) ) so how is Harmony a ploy to get what they already have? 

2. Sun works closely with the Apache foundation (or so I assumed), both making and receiving contributions, like BECL which comes with JDK 6 and contributing to tomcat etc. I would think that an Apache licensed JVM would be fairly well moderated? I mean if their JDK is inferior the free market will simply shun it and the project would wither.     

 3. WORA is a core feature for me, I've been using *nix exclusively since < Win 3.1 so it's understandable that Sun wants to protect that reputation. I can't see how this can be a concern though as Apples JDK doesn't run outside of OSX? (I wish it ran on the IPhone :( ).  Not only that but Sun has essentially abandon it's promise to WORA with Java FX .... (Ive been waiting since Dec 5th for a Linux port)

4. It's not limiting the number of JVMs thats a problem, I think that Apache's implementation represents a staging point for a really popular OSS project that garnishes input from many people that would otherwise remain silent. It can only help the platform evolve and hence forth, the companies that base their business models around it.

Java was .Net before there was a .Net. Sun has always been a company of vision. At this stage in the game, the freedom to rapidly react and evolve unhampered is paramount. Addressing such issues through the JCP is tedious and time consuming and of course is not totally democratic. Corporate America would likely not use a cutting edge distribution of the JVM, but the garage innovators would. It's about choice and in my humble opinion I think that Sun should let Java grow and focus on the official JVM's competitiveness, reaping the benefits of open innovation where appropriate as opposed to suppressing competition through the USPTO. Besides languages like C have only improved as a result of openness and their adoption has been beneficial to everyone.

Osvaldo Doederlein replied on Wed, 2009/04/29 - 6:52pm in response to: RIchard

Borland (and Symantec) never had a JVM, they had a JIT compiler that plugged into Sun's JVM. The JIT compiler is only one piece of a JVM and it's a very small piece of the Java runtime. And Borland's/Symantec's JIT compilers were extremely simple, they only looked good because we compared them to Sun's pure interpreter which was as slow as physically possible. ;-)

Sun didn't abandon WORA with JavaFX. Support for both Linux and Solaris are officially scheduled for JavaFX 1.5 (the next version, to be unleashed at J1). They just didn't make these ports a big priority, something I can understand because Linux (and any other OSes) are basically irrelevant as desktop platforms (wake me up again when the "Year of Desktop Linux" starts; 2009 so far is failing again).

And there's more: WORA doesn't mean that Sun is obliged to produce ports of any Java tech that's not naturally portable (not pure-Java). Even the Sun JDK, that Sun supports on 9 HWxOS platforms, could support a single platform, and it wouldn't mean anything, if others could port or do alternative impls for other platforms based either on formal standards or open source. The only reason why Sun carries the load of those ports is marketing - to promote their stuff, make it successful in the market - and of course, Sun has a good revenue stream in platform licensing and bundling stuff in JRE downloads. But I'm tired of this bull* of "Sun screws WORA because Sun didn't fund a port of X to my favorite OS".

Having said, that, JavaFX is not yet in the same ballpark of the JavaSE or other Java standards, because there's no open source release and no open specifications (JCP or other). Sun promised the OSS release (no deadline yet but I'd bet in JavaOne'09) so we must wait; when this happens, people from other platforms without a JavaFX port (e.g. FreeBSD) can just pick the code and port if if they like JavaFX.

Mike P(Okidoky) replied on Wed, 2009/04/29 - 9:09pm in response to: Osvaldo Doederlein

JavaFX is a bit of a disappointment for me. No Linux, and I don't believe J1 will reveal a Linux version either. Video and rich gui stuff remains taboo on Linux, companies don't want to see it compete in that sector I think.

I've been looking at ways to create a mobile gui, and I'm not seeing basic things like a table widget. The only useful gui controls I've seen One would think there would be a all sorts of showcases around the internet where people contribute widgets and bits and pieces you can copy paste from, but I'm not seeing it, other than galleries with useless demo stuff noone can use. I'm sick of seeing shiny gradients being shown off.

Without proper native JavaFX controls becoming available like yesterday, I'm afraid JavaFX is going absolutely nowhere.

RIchard replied on Wed, 2009/04/29 - 10:31pm in response to: Osvaldo Doederlein

Borland: Oh ghese.. It's been so long, it's a fuzzy college keg stand memory :-)  

WORA: I agree with you 100% FreeBSD and the OSX ports are great examples of the openness of Java working. But its not as easy as " just pick the code and port" at least not for for Java it's self.. I don't know how JFX will work. But I'm guessing it's probably going to be the same situation. 

The year of Linux: Don't get me started :-) but seriously 09 has been a great year for Linux so far. Ubuntu 9.04 is slick and receiving rave reviews. Also debian as a stand alone distro has never been better!

 Java FX: I hope you're right about J1 09. I'm particularly eager to see hardware acceleration performance as thats a big challenge on Linux given the driver situation..   



Stephen Colebourne replied on Thu, 2009/04/30 - 7:07am

Richard/WordWarrier - If you haven't read it already, my blog series  provide lots of background as to what Sun has been up to and how Apache Harmony is a useful force in the Java community.

Osvaldo Doederlein replied on Fri, 2009/05/01 - 9:18am in response to: Mike P(Okidoky)

I can't speak for Sun, and unfortunately Sun has yet to commit officially on release dates for the Solaris ports. My comment is based on the JavaFX's JIRA bugtrack (there is a bunch of bugs that mention Linux and/or Solaris, remarkably bug RT-3308: Media Support for Linux and Solaris, which is targeted for the Marina (1.5) release. The native componente package is a different story, it's the single major feature of 1.5 and it's absolutely coming in that release (and will be supported in the common profile).

Spare me from your conspiracy theories about video on Linux. The fact is that Linux still a huge infrastructure mess in graphics and even audio support, e.g. it does't yet have a decent standard graphics memory manager; video drivers remain a big problem as the kernel guys refuse to support a stable ABI for binary/closed drivers (and open source drivers will never compete unless provided by the hardware vendors - the hardware is too complex and evolves too fast); new distros are usually a lottery (now it's Ubuntu 9.04 where many people have to hack xorg.conf), etc.

I think that companies that produce professional media software just don't want to deal with Linux for obvious reasons: small market, too much development and support trouble.

Osvaldo Doederlein replied on Fri, 2009/05/01 - 9:49am in response to: RIchard

WORA: Despite of my last post, the JavaFX support for media is not really a big problem - or at least, not Sun's problem - because Sun is basically integrating to other people's codecs (On2, Theora, whatever) so JavaFX's media will play as well (or as bad) as in other Linux media applications.

The year of Linux: I was talking adoption and market success, not technical adequacy. To this date, Linux is used as the main desktop platform mostly by Linux fans that are also technical users (developers, admins). And a big part of this population have been defecting to MacOSX - where you can use a Unix toolchain if you like, but also Microsoft Office, top-notch multimedia and other desktop software, etc. Although this tendency is ironic because, from the POV of FOSS supporters, Apple is much more 'evil' than Microsoft...

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