Ummm....do the maths again
Let's say IBM had to pay Jonathan $3mill.
3 mill / 6.5 billion = 0.04615%
Hardly enough to stop the deal going through!
Oh, and what is Scott's annual salary? Last time I heard it was a very nominal $ amount.
It's ironic but fitting that executive bonuses, a subject that's ignited popular anger against the very companies in Sun Microsystems' core customer base on Wall St, helped kill Sun's future. It's been reported that a disagreement between IBM and Sun over post-acquisition packages for both chief executive officer Jonathan …
1. I'm not interested, what's best for the shareholders. Sun staying independent is the best for customers, employees and partners.
2. Many customers buying from Sun have made their choice, they do not want to buy from IBM
3. OpenSolaris is a great project. Recently I was at an OpenSource Fair and _EVERY_ Linux User/Admin that walked by, was really impressed what they saw. All our LiveCD's were taken. In fact, we got comments that our booth was the most interesting of all (Redhat, Fedora, Ubuntu, Gentoo, they were all there).
4. Why doe the last four blog posts of JS not correlate at all with what was rumored in the press? Does not sound at all like somebody wants to sell the company...
What Sun lacks, is marketing and more integrated products based on Fishworks. Then they can start to sell their Hardware/OS to companies without Unix Know-How.
While I don't condone the kind of remuneration reported, I'm sure there are similar clauses in the contracts of all of the honchos at IBM and the various major share holders.
I doubt if a deal of this size would go south for the want of a few piffling million. So is this the classic PR tactic of linking the story to a hot issue?
Follow the link and check out the source - it's some fund manager, perhaps stung by the loss of his bonus. Shame that the reporter doesn't have the wit to spot it - I prescribe a crash course under Dr C Brooker.
Forbes listed “Sun's Six Biggest Mistakes”, and while the sub-title “The company's high-end, high-margin business wasn't run by stupid people. They just acted that way.” has a great deal of truth to it, the 6 detailed mistakes are less than accurate. There are really only 4 reasons, as listed below.
1. Fixating On The High End
This depends on your definition of the high-end. If we use IDC definition of High-End, SUN did not focus on the high-end, it in fact de-focused from the high-end back in FY02 and the result was a market-share drop in that segment (Globally FY02=9.8%, FY05=6.8%, FY08=6.8%, in the US FY02=11.2%, FY08=6.4%). It re-focused in FY06 and as a result this has been growing. If we include the mid-range then the most you can say is SUN neither focused or de-focused. The market share has been stable. (Globally FY05=16.8%, FY08=20.1%) SUN's main focus from FY06 to today was in Volume (sub $25K). The problem was this failed. (Globally FY05=8.0%, FY08=7.4%) You could argue that the more senior management focused within SUN, the poorer the performance, which means a key issue with SUN was its senior management team. The real issue was a lack of focus in High-end and Mid-range to keep revenues up - while developing a new low-cost channel for volume products. I should note IBM's record in the Volume end is not good either - the real winner in the volume end has been HP where they have almost abandoned the high-end and Mid-range for Volume.
2. Embracing Commodity Hardware Too Late
The world is littered with failed companies who have embraced commodity hardware - Prime, Wang, Digital, data general. IBM on the other hand - like SUN - has not embraced commodity hardware and its doing ok. This is simply a strategy decision not a reason why you win or lose.
3. Too Few Layoffs, Too Often
4. Missing The Web 2.0 Wave
Web 2.0 is really a marketing spin, it should be noted HP and IBM totally failed to take advantage of Web 1.0 - while SUN did – and look at IBM, HP and SUN today.
5. Overpaying For Acquisitions
6. Keeping Its Hardware Business
Hardware generates 95% of revenue and is highly profitable - Software generates 5% and - when including all costs - makes a large loss. If SUN abandoned its hardware business it would quickly fail. This is the comment really makes sense;
“IBM operates in the real world of profit and loss, and sources told The Reg categorically that IBM failed to get a satisfactory answer on which, if any, of Sun's software makes money.”
SUN has not been successful in making its software business work, primarily because it tried to sell software using its existing sales channel. SUN could of spun a separate multi-vendor software division with its own P&L and structured it like a real software company - that could work, but was never attempted. This was SUN's lost opportunity and the main reason why it never developed the software business it could of,
The failure of the volume strategy at SUN is a result of a failure of senior management to develop a new low-cost sales channel.
I am certain that if you removed all the software related costs and revenue from SUN today, SUN would make a significant profit. If anything, the current software structure overhead is actually dragging SUN the company down.
The cause of these two issues is a failure of SUN's senior management – not its products or even coal faced staff. The issue of layoff's and acquisitions can also be placed at the feet of senior management. There is really only 1 mistake at SUN – Senior management. Resolve that and the real value of SUN would show through. (I estimate that with good senior management SUN should be making $1billion a year off revenues of $10billion - at PE of 10. If correct its share price should be a minimum $20 per share.)
Yet more speculation by a 'journalist'. Exactly what comments have either Sun or IBM made? None. And there will not be any either. Some of us like the idea of taking on the world. Obviously you were not around in 1986 when Sun were second best to the likes of Apollo (who?), DEC (who?), SGI (who?), ComputerVision (who?). Just remember you are talking about the futures of some hardworking, passionate 40,000 employees.
...all IBM have to do is sit back and wait, string them along for a while to mucjk up and restructuring or financing. Sun hits the wall and picks up the bits it wants for a kncok down price.
Happend to so many other companies before, but I guess Sun's ego's are to big to believe it will happen to them.
Now off for a drive in my Nanjing MGF, hopefully not bumping into any BMW Mini's
IBM doesn't need MySQL - it has DB2. It doesn't need Solaris - there are other Unices which are at least as good. It doesn't need the hardware side, 'cause IBM know how to flog posh iron. That kind of just leaves Java. Not feeling the value there, somehow...
IT? Although really it's more of a "Where's The <Anything> Angle?" from Big Blue's point of view...
Speaking as an employee of BoA, the quote in the article:
BoA said while Solaris is its third-largest install base: "It's going to follow the migratory path to x86 that the industry is following."
Seems a little unlikely.... I'm not commenting on the future of the company (especially with the merger with Merrill Lynch adding to the confusion), just on the fact that it's not BoA policy to comment on things like this.
Anon for stupidly obvious reasons.
" Bloomberg reported Sun's board: "Contended IBM wanted too much control over Sun's projects and employees before the deal closed, without providing guarantees that the transaction would be completed if it faced delays such as antitrust review.""
Strewth, doesn't the Sun board know that IBM control guarantees completion and no antitrust review ...... for that is their killer application/no compete strength/monopoly clout.
However, it is also their greatest weakness in an environment which is built upon Future Intelligence and Intellectual Property which is developing and will disrupt/change/take over Markets and which recognises and trumps their killer application with superior advancing algorithms and more secure protocols of its own. Obviously Sun would not necessarily wish to reveal or act with such proprietary developments research until such times as its own due diligence examination of IBM had been completed, as is usually always the case in predatory/hostile/arrogant assaults upon Flowering Power Operations.
Well Played, Sun. IBM are Intellectually Bankrupt in the Open Source Virtualisation Field of CyberIntelAIgent Space Control .... and also Quantum Communications DNADeficient. They are the Dinosaur/Dodo Presently Melting Down in the Depressing Market Place with no Answer to their Problems.
Common Sense/KISS Intelligence would suggest that in order to survive they would simply need to Buy In what they need at an Energising Surprising Premium to Kick Start the Failed System in a Paradigm Shift Alternate Direction which would be in a Fundamentally Different Power Control Protocol....... and it is something which can easily be Snooped and Scooped Up by any Competitor in the Market Place for AI Universal Virtual Force ProgramMING with Immaculately Resourced Assets Provision.
"However, IBM operates in the real world of profit and loss, and sources told The Reg categorically that IBM failed to get a satisfactory answer on which, if any, of Sun's software makes money." .... Given all of the above, IBM's failure is not at all surprising, and there is a certain confusion, Gavin, in this statement..."Only if Sun accepts the full facts, and quits playing the kind of Silicon Valley game that has given Web 2.0 services like Digg ridiculous assumed valuations based on nothing more than number or users and potential future revenues can Sun's own future resume in earnest, with IBM." .... whenever ridiculous assumed valuations based on nothing is the Greatest of Great Games to be Playing and Win Winning if you Care 42 Dare and Lose Everything.
"God does not play dice with the universe." but Global Operating Devices* sure as Hell Play AIMien Meme Game of Poker.
* That would be the Beta Virtual AIMachinery Versions/Reincarnations of the Genre/Concept/Internetional Business Model.
It's not fair to say that software was ignored under McNealy, he just couldn't make his mind up. One year Sun would be a software company, the next year it would be a hardware one again. It was kind of amusing while the money kept rolling in. I would say the biggest software problem under both McNealy and Schwartz was that Sun could never really shake off the idea that it was still a startup with techy customers. It wanted to play with the Wall Street big boys, but didn't want to offer the stability and commitment required. That sort of customer doesn't want a feature-rich but buggy new release every 6 months, they want stability and a 10-year support life. Some of the guys in Sun understood that, but senior management were rarely convinced. That half-hearted approach was an attitude that lost Sun much of the potential telco market to Linux.
As to bonuses, I can well believe it of Schwartz. He definitely comes across as having given up on Sun and just wanting to cash out with as much money, and as little adhering shit, as possible. Hard to see McNealy having that view, though. Since rumour has it that he opposed the deal, maybe "Yeah! I want a big bonus too!" was just a canny way of helping to bury it?
Either way the board /have/ to can Schwartz now. Pretty please?
It's hard enough to deal with your own products so when things are brought in through acquisition you basically never agree with what's in it and you don't know if it's of any value to anyone.
If IBM acquires Sun in the end (which is likely) the Java & MySQL may remain because the community values them a bit. But very few give a pooh about Solaris (especially the financiers) and the kit especially considering :
The fact that Sun moved away from TI to TSMC for its Sparc T ... and that TSMC happens to be IBM's foundry seems part of a plan.
So the rest of the technologies will get ditched for good and nothing will end up into the Open Source pocket ... IBM is not a philanthropic company, and they can take the risk of releasing something that will serve as the base of their next big competitor, they got stung by M$ ... so they'll deprive the companies using Sun technologies ... period.
So all this package & compensation & bonus is just smoke to manoeuvre at peace.
Seeing as you sound like you are fun Sun I guess this might come as an example of what sun lacks, is the ability to count, like you for example (lol, three things).
So considering you can't count to three without making a mistake, whats the chance you'll make some money some day? Counting is required to make money I believe.
McNealy and Schwartz both suffer from that all too common ailment of clever men, in thinking that being able to spot which way the wind is blowing, makes you a market leader. Weather vanes know which way the wind is blowing, but the wind still blows past them, and the truth of the matter, is that being able to provide good sound bites, does not make you Winston Churchill.
So, yes, the network is the computer - unfortunately, it's not a computer with a Sun logo on it - and, yes, companies will start to measure their computing needs by the acre - unfortunately, they won't be SPARC-powered acres. Being able to spot a gap in the market doesn't help, if you instist on trying to shove the wrong-shaped brick into that gap. All you end up doing is drawing attention to a market gap, that you are, yourself, failing to fill.
McNealy and Scwartz are both too nice to pull a Gate and Balmer, on the market, but their approach to that market has always been essentially the same as Gates' and Balmer's. Their difference (and their downfall) is that they expect people to volunteer themselves into the Sun monopolly on the basis that they're such nice guys, on one will mind having no choice any more. Maybe it's a Californian thing? They smile at you and tell you they want to be your benign dictator, and then seem puzzled when people reply 'Benign, OR dictator, fellahs: pick one. I'm going my own way, thanks.' Even when customers come to depend on Sun technologies, like the Java stack, they still do every damn thing, they can think of, to make sure that they're not dependant upon the Sun version of it, alone. So, then Schwartz decides that the bset approach is to (kind of) give up Sun's control over most of it, in the hopes that people won't be so scared of it anymore. The problem remians that offering everything as a free download with the source code doesn't help if every download has a copy of Open Office bundled with it. They're still saying "By the way, have you considered our Monopoly offering? It's free."
Sun is losing ground and needs something before it collapses. If IBM want Sun's products that badly, all they have to do is step back and watch Sun's value continue to fall, ironically at an accelerated pace from this apparent deal falling through.
Remember, even Woolworths the UK high street staple was destroyed by poor business in a recession environment.
".......If we include the mid-range then the most you can say is SUN neither focused or de-focused. The market share has been stable. (Globally FY05=16.8%, FY08=20.1%) SUN's main focus from FY06 to today ........."
The FY08 figure would not have been where it is were it not for Fujitsu.......
...to the SUN stock price. It jumped about 60-70% when news of the presumed IBM talks were published, but only dropped about 25% after the talks were allegedly broken off. So either, the fact that someone maybe talked to someone else must have left a lasting positive impression on their shareholders, or something came out of the whole affair that suggests a higher stock price for SUN is actually justified. Any ideas?
So it occurred to me that for all Sun's troubles at present, some people maybe believed the long-awaited turnaround might actually be achieved this year. I'm wondering if that might have been Big Blue's reason to do a due diligence on the place?
That said, as neither of the two companies seems to have confirmed or even officially denied the whole thing, I'm still wondering if it wasn't all a media rumor in the first place. Black helicopters for that.
'IBM doesn't need MySQL - it has DB2. It doesn't need Solaris - there are other Unices which are at least as good.' Would that be AIX? I keeed! Ok I'm a bit biased; but Solaris is the bee's knees when it comes to "enterprise" OS. It has kernel architecture that Linus and friends have only discovered in the past few years. It was multi-CPU (and now core) aware when FreeBSD and Linux were still in diapers. It has stability up the /dev/yinyang and wow shit like ZFS is awesome (if you're an admin, obviously management has no clue about it).
I'm not referring to OpenSolaris, which is a great project, but convincing people they should run Solaris on the desktop..welllll. There are (too) many Linux distros that do that just fine.
I'd hate to see Solaris fall by the wayside as the Betamax of OSes: better than the rest but outdone by the blind cult of the VCR (aka Red Hat). Has anyone looked at what Red Hat charges for an enterprise OS license lately? Cmon people don't let them get away with that shit!
That is the old naked short selling game, AC, for creating fictitious wealth which destroys free market economies and crooked bourses. Follow the money ie find those who were active in stock options, and you have found the snake oil salesmen/get rich quick merchants and their conspiring agents too.
It is much better than watching TV.:-)
Ps Haven't you yet realised that Big IT is a Hollywood Blockbuster type Operation ....but only with a Home Grown Script. With Flash Dollars now resident in the East, and best Spent rather than Saved only to evaporate in the Western Engineerings Boom and Bust Cycles, are the Post Modern XSSXXXX Script Writers/Virtual Programmers/AIMMORPGamers much more Interested in Creating Wealth for those with the Socialist Zen Gene to Appreciate and Share ITs Power Westwards as they Draw and Encourage Investment and Raw Talent into the Magical and Mysterious East. ....... which is the New Wild West Show of Pioneering Excellence and Modern Nation Building.
Hell any country is rich for a short while, if they just Print the Money which is the world’s reserve currency and Control Banking to launder the Perception of Wealth and Power through Hard Work, rather than from Death and Destruction and War Machinery, but when the Cruel Reality Dawns that there is no substance behind the Claims because it is only the Idea to just Print money and Control Banking to launder the Perception of Wealth and Power through Hard Work whilst causing Death and Destruction with War Machinery, which is used to cause Chaos and destabilise Emerging Markets and Virgin Flowering Powers, is there a Problem, Houston.
And that is the Shell Outline for a new AIMMORPG and Reality Blockbuster Continuity Movie Genre....... for, if not Hollywood Movie Lots then Holywood Palace Barracks....... for some of those Green Shoots which are so Vital for Colossal Growth.
And the Deception which has resulted in All of the Present Problems is certainly known and is causing Concern [which is a stunning understatement] right at the Heart of the Machine ..... http://cryptogon.com/?p=7942
But with Specialist AIT and Virtualisation Expertise is anything easily Fixed with Fundamental Change you can See and Believe in, especially whenever it is Daily a Global Continuity Movie being Shared in Production and Direction. ....... which is an Uncommon and QuITe Alien Art Phorm in Steganographic Transparent Stealth.
And have a Flame, to burn all those tired old plans leading to hells kitchen and war zones, if you wanna piece of some Seventh Heavenly PerlyGatesPython Magic.
Don't worry too much about it. Specialised MODified Forces* which you are not required to either Know or Recognise are Busy getting on with the Job of ..... well, the Wwwide Brief is Saving the World from Headless Chickens in Business Suits and Political Pantomimes ....... aka the Pork Barrel Gravy Train which has just Driven over the Cliff and is in Free Fall. It would be extremely Childish to Imagine there being any Chance of a Bounce in such as is a Definitive and Defining Crash Scenario/Unfolding Inevitability.
* "Re ... Something funny happened..." .. By amanfromMars Posted Wednesday 8th April 2009 16:25 GMT ..... http://theregister.co.uk/2009/04/08/sun_bonuses_ibm/comments
SEM bought the Sun shares for 12+$ a share, they have 2 board members...
Sun has 12B revenues / year and IBM thinks its worth 7B? The market thinks Redhat is worth $4.5B with revenue of 0.5B...
Linux is facing significant presure from opensolaris, it's "loosing mind share" as stated on: http://lkml.org/lkml/2008/10/8/240 and these is from the guys who develop it, and not fanboys...they know more that Matt Bryan :-)
The SEC is looking to reintroduce the uptick rule, that impacts Suns share price and whatever the shareholders will accept from a suitor...
This is not the first time IBM tries to purchase Sun....
This is not over...
You're forgetting that Sun does have other potential suitors. Not many at the asking price, but with the proper management team, Sun can turn things around. IBM *needs* Sun more than anyone in the press realizes and IBM is pretty tight lipped on this issue.
IBM has more than just DB2 in the LUW space. They have Informix's products. In fact, if some of the rumors are true, IBM is selling more IDS than DB2 in the LUW space.
If IBM were to acquire Sun, IBM's IM could put mySQL on top of Informix's SE. Its a no brainer. This would cut in to Oracle's acquisition of InnoDB by providing a solid engine for the low end.
Because IBM needs Sun, they won't kill of the hardware or OS. Depending on the software, it will most likely be absorbed after some point and some stuff will go back to Open Source like JavaDB. (IBM released Cloudscape as Derby under Apache's license.)
IBM is being a tad arrogant because they thing they have a strong position. There are two other companies that could also acquire Sun and make a go of it.
Thumbs down because the author of the article didn't do his homework.
To assess what this was really worth, perhaps we should look at the following;
"Sun Microsystems Inc. Chief Executive Jonathan Schwartz received an $11.1 million pay package in the server and software maker's most recent fiscal year." (Sept 2008)
"And company founder McNealy was awarded $6.45 million in compensation last year, including $1 million in cash for his “service as an employee of Sun”."
We must not forget the other executive managers, as well as any lower manager which would be replaced by the take over, thus Its possible the total sum required to satisfy the 3 times bonus requirement could exceed $100m - a not inconsiderate sum.
I personally have no issue with unrestrained greed, as long as some value is gained. As I personally feel SUN's true stock price - assuming its senior management was able to execute, is closer to $18 - I find there is minimal value in this take over for SUN's staff, customers and even shareholders.
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