"Open source in storage is relatively new," Lyman says. "There's some potential here. They have managed to grow that business."

Sun may be banking its future on open source, but with an approach that combines both software and hardware, judging by recent comments from CEO Jonathan Schwartz. "With ... the market increasingly looking to open source innovation as a vehicle to escape proprietary vendor pricing, we believe Sun is well positioned to weather the downturn and ultimately become the biggest beneficiary in the open source revolution in both systems and software," Schwartz said in Sun's Oct. 30 earnings announcement.

Sun's Solaris operating system, and the open source version known as OpenSolaris, are promising parts of Sun's software portfolio, King says. Sun is gaining traction with open storage, but that still remains a small part of its overall storage business with $25 million in quarterly sales, a "drop in the bucket," King says.

"Sun's obviously in a very bad situation," King says. "How you pull a large vendor out of a nosedive like this is beyond my business wisdom."

Better marketing might provide some of the answer, says ITIC analyst Laura DiDio, who says Sun has excellent technology, but doesn't do a good enough job bragging about it. Sun customers are generally satisfied, but DiDio says rival IT vendors such as Oracle are much quicker to trumpet customer success stories.

Sun, for instance, offers server management tools guaranteeing 5 9s of uptime, as well as a low-cost alternative for server virtualization known as xVM, DiDio says. But poor marketing has prevented them from making significant headway with IT buyers, she contends.

"One of the big problems they've had all along is communicating their message, marketing in other words," DiDio says. "When Oracle is going to do something, or is even contemplating whether to do something, [CEO] Larry Ellison opens his mouth and speaks with a big bullhorn."

DiDio believes Sun will survive this economic downturn. The question is "can they thrive," she says. "To do that they are going to have to really step it up by orders of magnitude. That means marketing, that means aggressively telling people 'here's our story, here are our customers.'"

Sun's public image probably wasn't helped last month when co-founder Andy Bechtolsheim joined start-up Arista Networks and took a reduced role at Sun. Sun went into spin mode, claiming that Bechtolsheim would "continue his present involvement," when in fact Bechtolsheim said he would work at Sun "no more than one day a week" in an advisory role. 

Executive changes are usually announced in a more organized manner. Even a well-handled departure can harm public perception, DiDio notes.

"When you see founders leave, that erodes confidence unless the person is a raging idiot," she says. "The investment brokers take a look at this and say 'hmm.'"