Sunday, November 16, 2008

Now is the time for Sun to buy itself back

As a 9 year Sun veteran, I watch the continued turmoil inside of Sun Microsystems with a somewhat heavy heart.  A few days back Sun announced yet another lay off, this time 18% of the work force.

I actually think that some of the cut and the reorganization that is coming with it is good.  Sun still had some areas of the company that were actively holding it back from evolving and the rumors i hear are that the cuts are going to be heavy in these areas.

However, I am afraid it wont be enough.

Unlike many others, having seen Sun from the inside, I am actually a Jonnathan Schwartz fan.  I've watched him from the moment he took over and seen a bold, innovative, and incredibly smart guy with the guts to make big bets for Sun's future.   However, I think his ability to execute has been hamstrung  on a number of levels. 

From the inside, he has had to fight a deeply entrenched culture that desperately want to hang onto Sun's existing way of doing business, selling servers, even as market forces grind the margins on that business into the dust.   From the outside, he is stuck with having to make quarterly figures for the stock market, even though it takes a  lot more the 3 months to retool a company.  Every time he cant make quarterly figures, he has to figure out how to do what he is trying to do with even less people as he makes the market-demanded personnel cuts.

Which gets me to the point of this blog.  Sun's market cap is down to 3 billion dollars.  Sun has at least that much still in the bank.  I believe that now (or not too far in the future, if you want to bet on the market in general dropping even lower)
is the time for Sun to take itself private.  Buy the controlling interest off the market and give Jonnathan the room to succeed or fail on the merits of his ideas... not because a short-sighted markt is forcing upon him short-sighted decisions.

No comments: