Sun banks on open source for its survival
With latest restructuring, it's make-or-break time for vendor's open-source strategy
Computerworld - Sun Microsystems Inc. is slashing its workforce on a scale typically reserved for automakers, announcing today that it plans to lay off up to 6,000 employees — a restructuring that comes on top of earlier cutbacks made over the past year.
In moving to cut its current workforce by between 15% and 18%, Sun is trying to stay ahead of a falling knife. And today's announcement made it clear that Sun officials are banking on the the company's open-source strategy to help it pull through.
Sun finished its fiscal first quarter, which ended in September, with a $1.7 billion loss on $3 billion in revenue, down 7.1% from the same period last year. The company needs to boost its sales at the same time that the growth of worldwide IT spending is slowing down.
But in the current economic climate, "it will be difficult to depend on increasing sales," said Charles King, an analyst at Pund-IT Inc. in Hayward, Calif. "The only way the company will achieve profitability of any sort is to deeply slash expenses. And the easiest way to achieve that goal is to start laying off people."
Nonetheless, Sun CEO Jonathan Schwartz contended that the economic downturn will work to his company's advantage and vindicate its open-source moves, which include the release of the OpenSolaris operating system and the acquisition earlier this year of database vendor MySQL AB.
"We are preconfigured for the downturn," Schwartz said in an interview with Computerworld last month. He claimed that users will be more inclined to try open-source products such as MySQL, OpenSolaris and Sun's GlassFish application server during a time of economic stress.
But the company itself wasn't preconfigured for such a sharp downturn — a message that Schwartz is sending with the internal restructuring announced today. In addition to the planned layoffs, Sun shook up its software organization, creating two new business groups — one focused on application platform software, the other on cloud computing and developer technologies. Sun also folded its systems platform software products, including Solaris and its virtualization tools, into its systems group.
Schwartz said in a statement that the software realignment was designed to "accelerate our delivery of key open-source platform innovations." Sun's announcement added that the new organizational structure "is a recognition of the comprehensive role software plays in the company's growth strategy." And it said that as part of the changes, Rich Green, who was Sun's executive vice president of software, "has chosen to leave the company."
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- The Benefits of IBM: The Savings of Open Source Download Now
- The Critical Role of Support in Your Enterprise Mobility Management Strategy Most business leaders underestimate the importance of tech support when they choose an EMM solution. Here's what to put on your checklist.
- Separating Work and Personal at the Platform Level: How BlackBerry Balance Works BlackBerry® Balance™ separates work from personal on the same mobile device, right at a platform level. Find out how it can work for...
- Protection for Every Enterprise: How BlackBerry Security Works Get an IT-level review of BlackBerry® Security, addressing data leakage protection, certified encryption, containerization and much more.
- Live Webcast Best Practices for the Hyperconverged Enterprise Network To the Age of Constant Connectivity and Information overload
- Live Webcast On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy...
- Live Webcast Endpoint Backup & Restore: Protect Everyone, Everywhere Arek Sokol from the bleeding-edge IT team at Genentech/Roche explains how he leverages cross-platform enterprise endpoint backup in the public cloud as part...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,...
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the... All Open Source White Papers | Webcasts