ajayshah@almaak.usc.edu (Ajay Shah) (02/20/91)
Don't you think it's a bum deal for Sun: they invent SPARC, they
do a fantastic job doubling the speeds of machines every 2 years
since 1982 or so, they have wonderful attitudes on openness etc.,
they do a tremendous job of SunOS and endup giving it away for
free to cloners, they positively beg people to clone and compete
with 'em, and they endup returning profits like $150e6 last
quarter. Most probably their highest profits ever too!
Look at Intel: they start out with a terrible idea on the 8086
(relative to Motorola offerings at the time), they strike it
rich with IBM (just like Microsoft), they do a terrible job with
the 286, the 386 is a nice architecture but they single source
it, they single source the 486, they charge $1k for a chip and
they return oooodles of profits.
What is this story telling us? Does this mean that market
pressures prefer corporate strategies like Intel's -- no matter
how terrible Intel might be towards it's customer base? If you
did a startup today, would you try the Sun path or the
Intel/Microsoft/IBM way?
--
_______________________________________________________________________________
Ajay Shah, (213)734-3930, ajayshah@usc.edu
The more things change, the more they stay insane.
_______________________________________________________________________________gillies@m.cs.uiuc.edu (Don Gillies) (02/20/91)
ajayshah@almaak.usc.edu (Ajay Shah) writes: >What is this story telling us? Does this mean that market >pressures prefer corporate strategies like Intel's -- no matter >how terrible Intel might be towards it's customer base? If you >did a startup today, would you try the Sun path or the >Intel/Microsoft/IBM way? Relatively speaking, the Intel/IBM/Microsoft platform is more of an open architecture than the Sun platform, if you judge openness by the number of (cpu, card, monitor) vendors that compete for market share. That is why Intel is doing so well. MS-DOS has always been an open operating system -- clone BIOS's began to arrive just months after the PC was introduced. I believe that Sun did not license SunOS until years after MS-DOS was widely available. In other words, Sun may seem like an "open architecture" company, but the PC is much more of an open machine than a SPARC workstation. Since Intel makes chips and Sun makes turnkey UNIX boxes, they are not really comparable. Compare Sun to any PC systems vendor. Is any clone vendor making the same ROA (return on assets) as Sun? I bet the answer is no. Most clone makers are struggling to keep their heads above water. Intel charges *fair* prices for their CPU chips, and they deliver mass quantities sooner than nearly all other microprocessor merchants. This appearance of timeliness (their chips are always buggy when first delivered) and capability for high volume deliveries, are two reasons why they make (and deserve) a healthy profit. --
davidsen@crdos1.crd.ge.COM (Wm E Davidsen Jr) (02/21/91)
In article <30522@usc> ajayshah@almaak.usc.edu (Ajay Shah) writes: | | Don't you think it's a bum deal for Sun: they invent SPARC, they | do a fantastic job doubling the speeds of machines every 2 years [ more on Sun being open and Intel being closed ] If you compare Sun, competing on an even footing in an open market, and Intel, selling in a closed market, you are not comparing like situations. With all the bashing of Intel for chip design, in truth there was not much to choose between Intel amd other 8-bit chips. When 16-bit came out, Motorola and others started fresh, and Intel did the 8086, with the idea that it could take 8080 source code which had been mechanically translated to 8086 code, and would still run. While the computer science types thought that the 8086 was ugly and non-symetric (it was), the vendor types thought it was great that so much existing software could be ported so quickly. IBM used it for their PC, and the software vendors wrote for it. The rest is history. Single sourcing makes sense if you can get away with it, and Intel has, and probably will for the forseeable future. That makes them smart businessmen in my book, but it doesn't indicate that the market favors Intel practice over Sun practice, it indicates that they are in different markets. Oh well, this is really ecconomics, not arch. -- bill davidsen (davidsen@crdos1.crd.GE.COM -or- uunet!crdgw1!crdos1!davidsen) "I'll come home in one of two ways, the big parade or in a body bag. I prefer the former but I'll take the latter" -Sgt Marco Rodrigez
smith@sctc.com (Rick Smith) (02/21/91)
ajayshah@almaak.usc.edu (Ajay Shah) writes: [deleted review of Sun's modest success and Intel's big one] >What is this story telling us? Does this mean that market >pressures prefer corporate strategies like Intel's -- First, I note an assuption that it is important for a startup to have the goal of making *big* profits and somehow it's a failure to make more modest profits. Sure, you can never be too rich. On the other hand, it's nice to have a job that holds some interest and satisfaction for onesself. More than a few people (myself included) are willing to sacrifice some income to do something worthwhile rather than something less satisfying. And it's nice to have customers who are happy with your products as opposed to ones who feel victimized or just stuck. Second, I note the assumption here that such thoughts would naturally occur to an MBA. Good administrators have broader goals than higher profits. Profits are crucial to survival, but I haven't seen anything to imply that pursuing high profits as an explicit goal (usually a shortsighted strategy) make a company's survival more likely. "Pursuit of Excellence" provides some counterexamples relating to this. > The more things change, the more they stay insane. Like many things, point of view is important. Rick. smith@sctc.com Arden Hills, Minnesota
kevinh@cmi.com (Kevin Hegg) (02/21/91)
> they have wonderful attitudes on openness etc., You mean they had a wonderful attitude. Looking at their recent actions regarding Unix, NFS, and window systems it looks to me that they want it their way or no way. Back in the days of the Sun 2 I used to think of Sun as THE open company, but not anymore. > they do a tremendous job of SunOS Yes, Sun has some sharp people doing good work, but so do a lot of the other Unix vendors. I would not rate SunOS as a tremendous job. It has no significant advantages over other Unix implementations. (uh oh, here come the religious flames). > they endup returning profits like $150e6 last quarter. Most probably > their highest profits ever too! I wouldn't count Sun as a long time player yet. There are much bigger giants that have fallen (hard and fast). They got clobbered when they made their sudden transition from Motorola to SPARC. People just stopped buying for awhile. Apparently McNealy caused a minor uproar at the last Sun Users Group meeting when he threatened to abandon the early SPARC users as the SPARC technology progresses. Also, Sun has not reached the level of sales of Macs and PCs per year where they can be assured of survival due to the installed base. > What is this story telling us? Certain companies come into the position of having "sexy" products. If they can capitalize on this short-lived "sexiness" they have a chance for survival. IBM (and clones) did it with the PC. Apple did it with the Mac. It remains to be seen whether Sun or Next or MIPS can do it. Sexiness (in this context, of course) to me is some perceived or short-lived technical superiority which causes people to insist they have to get one of these products. And it is the fuel for all of these religious wars that are so common on the net. Kevin Hegg, EDS Corp - Center for Machine Intelligence 2001 Commonwealth Blvd., Ann Arbor, Michigan 48105 Phone: (313) 995-0900 Internet: kevinh@cmi.com Applelink: D5990