Sun banks on open source for its survival

With latest restructuring, it's make-or-break time for vendor's open-source strategy

Sun Microsystems is slashing its workforce on a scale typically reserved for automakers, announcing Friday 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 percent, Sun is trying to stay ahead of a falling knife. And Friday's announcement made it clear that Sun officials are banking on the company's open-source strategy to help it pull through.

Sun finished its fiscal first quarter, which ended in September, with a US$1.7 billion loss on US$3 billion in revenue, down 7.1 percent 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. "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."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Sun Microsystemsjob cuts

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Patrick Thibodeau

Computerworld
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?