Sun Microsystems is on the ropes. The New York Times says so, the hallway conversation starts and ends with “too bad”, and the wagons appear to be circling around, or rather, behind Jonathan Schwartz, leaving him outside the fort as the gates are closed.
Much of this capitulation to a situation Sun has been in for some time could come from the lessons of this long struggle in our country’s political and economic systems, which have become inextricably intertwined to the point where it apparently matters not at all what either candidate does or proposes. Instead, the public intuition is that change in management is less risky then standing pat.
With all this pressure on Schwartz, perhaps the best way to view the situation is to determine a so-called Failsafe deadline, so described as the point in time beyond which nuclear bombers can not turn back from their missions. In Sun’s case, what difference would a change in leadership make, and at what point?
The technology business is in the throes of a transformation to the so-called cloud computing paradigm. Despite what Oracle’s Ellison has said, Microsoft’s Windows Azure guarantees that at some point in time cloud computing will cross over and accumulate more than 50% of enterprise resource allocation. Calibrating that date will either confirm or undermine the strategies of the major platform vendors.
When Jonathan Schwartz took over the company, Sun was perceived as a major platform vendor with challenges in monetizing its resources. His strategy of marshalling the company’s assets and harnessing the viral nature of open source dynamics has maintained Sun’s relationships with developers, but nowhere has there been the kind of disruptive messaging around the cloud computing paradigm that Schwartz employed to such good effect in marketing Sun in the Web 2.0 phase.
By contrast, even Apple jumped aggressively into the conversation with MobileMe; Google, Amazon, Rackspace, even Dell with a URL grab not only had a message but extended it with price cuts, acquisitions, and social media product announcements. Schwartz, who came to the job with a refreshing understanding of the power of blogging, Web services, and open source, projected confidence that these tools and communities could be intertwined with Sun’s leadership in disruptive hardware design and systems synergy.
The Schwartz version of a Jobsian reality distortion field went this way: If you understand the inevitability of small pieces loosely joined, you can build an interactive swarm-like community that will pool community resources to solve problems before other competitors even start to hear about them from top-down IT hierarchy. This must have been the rationale behind supporting community efforts such as Startup and other Camps. And it certainly was at the heart of the MySQL acquisition, which suggested the use of the open source database vendor as a sales channel through the entrepreneurial radar of the startup community and its open source DNA.
The media questioned where the rubber would meet the road, but as Google, Salesforce, and Facebook gathered incredible momentum and mindshare around Web architectures that spoke to the cool-running data center and virtualization innovations led by Sun, the fact that Sun wasn’t reaping concrete rewards didn’t mean they couldn’t over time.
That’s why Sun’s failure to keep the messaging ahead of the economic crisis is so damaging. Schwartz has always had the full support and partnership of his predecessor Scott McNealy, but the rumors that the board is looking for a replacement speak either to scapegoating or a capitulation to the realities of the marketplace. But why now?
Sun has the money to stay in business, and the portfolio to survive in the marketplace for some time to come. Why, then, is Schwartz’ scalp on the line? Perhaps it’s because, as we’ve seen in recent weeks in the McCain campaign, there’s a line forming to jump ship before the water reaches the band. Certainly the billion-plus loss just reported is enough cover, but more likely the lack of a cloud strategy that makes sense for Sun is at the root of the panic.
What then can Schwartz, or more accurately Sun do to change the dynamics of an increasingly dire situation. For starters, Schwartz has to do what few have done with the cloud computing discussion: answer the hard questions around security, compliance, and identity management with a disruptive view that speaks to Sun’s strengths. Sun has dogs in these hunts, and credibility with communities, particularly the beleaguered financial service which threaten Sun’s survival as they collapse and merge.
Schwartz can draw on a strength we’ve seen little of in recent months or perhaps years, the ability to assess where the marketplace and the conversation can go regardless of where the brass ring may end up. Part of the reason he ascended to the throne at Sun was as a Nixon going to China. Where McNealy baked antipathy for Microsoft into his personal and therefore corporate brand, Schwartz could manage rapprochement via CTO Greg Papadopoulos.
Now Schwartz needs to handicap the cloud wars and decide who the winners will be short, medium, and long term. He’s working with Amazon Web Services, but then so is Microsoft. Google and Apple seem unwilling to forge strategic alliances as App Engine builds out and MobileMe stabilizes without a corporate instantiation. That leaves Microsoft as the wild card with either the most or no chance of exploring mutual interests.
Strange bedfellows, indeed, but what other rabbit does Schwartz have up his sleeve? Either Oracle or IBM would be glad to pick over Sun’s bones and lift Java out of the remains. If Jonathan sits down and ponders Windows Azure, Mesh, and Live Services, does he see the enemy or the emergence of an open cross-platform RIA uber OS that could easily integrate Sun virtualization and middleware to leapfrog enterprise concerns about cloud computing now, as opposed to several years from now when these problems will have been solved through a combination of standards and political restructuring of requirements in the new Washington.
It’s a heady leap, but who better than Schwartz to paint a disruptive picture in a way that takes the pressure off the short term and gives Sun breathing room while other companies have the opportunity to screw up equally well. Schwartz has the opportunity and the bank roll to sell the enterprise on cloud computing across an open landscape not bound by the old political calculations but rather a nonpartisan approach that seems to be driving Obama into the White House. Besides, a decision has to be made before it’s too late to call the bombers home.