Sun Vs. Microsoft 18623 Essay Example
Sun Vs. Microsoft 18623 Essay Example

Sun Vs. Microsoft 18623 Essay Example

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  • Pages: 17 (4559 words)
  • Published: November 12, 2018
  • Type: Research Paper
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Sun Microsystems, Inc.

Introduction

In 1998, Sun had become a significant player in enterprise network computing worldwide. Operating in 150 countries and generating $8 billion in revenues.

Sun faced tough competition from Intel, HP, IBM, CPQ, and SGI in the technical markets. In 1998, the information technology industry, which was Sun's target market, was fiercely competitive. This industry was known for its rapid and constant changes, frequent advancements in performance, short product life cycles, and price cuts.

Sun Microsystems has a great reputation that will continue to benefit the company. They were the top provider of UNIX-based servers, and Java played a key role in driving sales.

Products ; Services

Sun Microsystems is a leading company in their industry.

Since its establishment in 1982, Sun has been dedicated to offering products with unparalleled capabilities. This commitment emanates from the compa

...

ny's CEO, Scott McNealy, who has championed the mission statement, "The Network is the Computer." As Sun's president since 1984, McNealy has spearheaded the company's growth by providing customers with unique and advanced features. For years, Sun has revolved around McNealy's vision of making all computers compatible with one another through a network. Regardless of different operating systems from various manufacturers, computers can seamlessly collaborate. The following Sun products strive to achieve this objective and enhance global communication.

Enterprise Servers

Sun Enterprise servers offer unparalleled scalability, enabling customers to focus on expanding their business without concerns about keeping pace with their information systems.

From the workgroup to the data center, Sun Enterprise servers provide customers with the necessary power to transform their business into a successful online venture and stay ahead of the competition.

Networ

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Storage

Sun is revolutionizing storage solutions for the digital age. In today's enterprise environment, a perfect synergy between computing, networking, software, and storage capabilities is essential for achieving optimal performance. Sun's Intelligent Storage Network architecture delivers this balance, allowing for seamless information sharing, protection, and management across multiple platforms. Additionally, Sun offers impressive scalability, investment protection, and a flexible, incremental approach to growth.

Desktop Systems

The Sun Ultra series offers desktop systems with top-notch processors, fast networking capabilities, advanced graphics, and exceptional application performance. These systems provide supercomputing power right at your fingertips and are compatible with PCs for seamless integration. Additionally, our Java Station network computers require minimal administration, making them a cost-effective choice for businesses.

Java Technology

Java technology, developed by Sun, has become the most widely adopted innovation after dominating conversations during the dot-com era. It effectively addresses complexity, incompatibility, and security concerns. By reducing costs and creating new opportunities in the thriving dot-com industry, Java technology proves to be invaluable.

Sun Microsystems offers the “Road to Java” program, which includes more than 75 authorized Java Center service locations worldwide. This program can guide users from evaluation to pilot programs to enterprise-wide implementation.

Solaris Software

Sun provides Solaris software, which serves as the ideal platform for network computing. It features a 64-bit operating environment and server products that offer mainframe-class reliability, complete PC interoperability, and comprehensive Internet services. With Solaris software, users can support multiple-terabyte data warehouses and accommodate thousands of users. Sun also offers comprehensive enterprise management tools, robust security solutions, and globally functional email services.

This combination of features provides a solid foundation needed for continuous connectivity, which is crucial in the dot-com industry where periods

of downtime can lead to significant financial losses.

Advanced Development Tools

Sun offers a complete solution for quickly creating high-quality applications for various platforms such as Solaris, Linux, UNIX, and Windows. It also includes a new and powerful Integrated Development Environment (IDE) that improves productivity by supporting multiple programming languages.

Professional Services

Sun provides a comprehensive range of services that assist in the planning, design, implementation, and management of cutting-edge dot-com solutions.

Their information systems are closely aligned with their business goals through the collaboration of Sun's consulting and integration experts and their customers.

Support Services

Sun ensures "mission-critical" support at all times by leveraging the world's largest UNIX service organization, which supports over one million systems. In addition, Sun's VIP program resolves complex problems and eliminates finger pointing by partnering with leading software vendors.

Educational Services

Sun offers design, training, consultation, and management services customized to the current skill levels of their customers' staff, enhancing their efficiency.

They offer courses for individuals and groups, at the customer’s place of business or in classrooms in more than 85 countries around the world.

Consumer and Embedded Devices

With their platform-independent Java technologies, Sun is extending the net all the way to consumer devices "dot-comming" everything from smart cards to wireless phones to touch-screen kiosks. To build this new generation of network-ready information appliances, manufacturers are turning to Sun for fast, low-cost Java processors, the lightweight Java OS operating system, and other enabling technologies so the customer can access the information he/she needs, anytime, anywhere using just about anything.

MicroElectronics

Sun’s UltraSPARC microprocessors accelerate multimedia and networking applications with their innovative architecture and VIS instruction set. They can be thought of as the high-performance engine behind the net, powering networked systems

from routers to supercomputers. Java processors, with their high performance, small memory footprint, low power consumption,and low cost enable revolutionary thin-client products from network computers to Web phones.

Telco Servers and Java

Sun provides Telco servers that cater to the convergence of telecommunications and Internet services. These servers offer stable network service platforms and infrastructure components. Sun's Netra products come in various options, ranging from single-processor servers to fault-tolerant multiprocessing systems. Additionally, they develop connectivity and storage solutions that adhere to strict Telco requirements. Moreover, Sun offers innovative Java solutions for telecommunications companies and Internet service providers seeking to establish new businesses.

Java Misconceptions

Java, a widely recognized programming language developed by Sun Microsystems, is often misunderstood.

Java has become an integral component of our everyday lives, found in smartphones, TVs, and web browsers. It was originally developed for consumer electronics back in 1990 but soon gained recognition as the ideal platform for the Internet. In 1996, Netscape integrated Java support into its Navigator Web browser. As technology advanced, Java applets now mainly consist of simple animations and user interactions.

The future holds promise as full-blown applications can now be accessed over the Internet. Just imagine being able to utilize Microsoft Office directly from your television. This process starts with a Java applet that is summoned by and embedded within a Web page. The Web browser then downloads and executes the applet on your machine. This idea of running applications on your own system is an important innovation brought about by Sun Microsystems. Additionally, it allows for tasks to be performed on the remote computer instead of on your personal device when engaging with interactive content on a Web page.

Java

enables the execution of tasks on the client's system rather than the server, thereby releasing Internet resources. If all applications were executing on remote computers, it would overload servers and result in a complete halt of the Internet. Java's emphasis on security and platform independence has contributed to its popularity. Sun Microsystems developed a language that can be coded once and executed on any computer, regardless of hardware or software setup. This groundbreaking capability allows for program compatibility across a wide range of computers.

Platform independence and strong built-in security are crucial for Internet applications, and Java provides this necessary security, making it capable of bringing about a computing revolution.

Sun's Current Mission

Sun is currently focused on leveraging their expertise, understanding, innovation, collaboration, and commitment to their clients and offerings. With over 17 years of experience in network computing, Sun has been at the forefront of the Internet and has played an important role in developing the renowned Java technology. They have a thorough understanding of businesses' essential needs such as simplifying processes, reducing complexity, minimizing costs, and maximizing productivity.

Sun offers attractive products for different industries, such as education and retail. They have developed workstations, servers, and high-speed technology that brings about a transformation in high availability. Sun acknowledges their limitations in meeting all requirements on their own and thus has formed strong partnerships with companies that specialize in delivering excellent products for specific fields. This collaboration leads to the provision of the best available solutions for customers. In addition to creating innovative products, Sun is committed to providing exceptional service and support.

Technical support is available 24/7 via email and/or toll-free phone calls.

Current Goals

Sun Microsystems aimed to

create a computer system that allows communication between different builders. Their mission statement highlighted the importance of experience, understanding, innovation, collaboration, and dedication. However, there is no one-size-fits-all method for achieving this computer communication among all builders.

This is more like a testing ground for continuous trial and error processes. Hence, Sun is not seeking linear growth, which can be quantitatively defined as moving from point A to point B. Instead, they have established a completely new industry and experienced exponential growth. This success can largely be attributed to their wide range of products.

Sun Microsystems believes that setting specific goals is unnecessary because they recognize their uniqueness compared to other companies. According to Ed Zander, the President and Chief Operating Officer, their objective is to become the leading provider of technologies, products, and services driving the Internet economy. Fortunately, they have achieved significant success in this endeavor. Sun acknowledges the opportunity to meet the universal need for effective communication and has gained a diverse market, though it may be somewhat undefined. Unlike other companies, having measurable goals would likely impede Sun Microsystems due to imposed limitations. In "Competing for the Future," Hamel and Prahalad's book provides clear guidelines that can guide any company towards success.

Sun Microsystems embraces market changes, conducts research and development for future products, and takes proactive measures. Their objectives are flexible yet focused enough to remain adaptable. Sun acknowledges the significance of research and development, evident in their 27% increase in spending last year.

Last but not least, Sun acknowledges the importance of being proactive and accurately anticipating their customers' needs and upcoming technological trends in the industry. While responding

to environmental changes is essential, leading innovation is crucial. Sun acknowledges the significance of effectively competing with current and potential competitors to avoid loss in revenue, decrease in profit, and decline in market share.

Current Strategies

Sun Microsystems' strategy continues to be aligned with its longstanding mission.

Sun's mission is to guarantee network access for everyone by offering accessible, affordable, and practical products. They strive to empower people worldwide to utilize the network's capabilities. Their current strategies prioritize adaptability in an ever-changing business and social landscape, while also emphasizing efficiency and productivity to minimize expenses. The competition presents both challenges and opportunities for Sun, leading them to embrace continuous innovation as their guiding principle. As a result, they invest significant resources in Research and Development.

Additionally, Sun Microsystems has introduced innovative payment methods for suppliers to ensure prompt service and maintain a competitive advantage. Their goal is to reduce reliance on external factors by diversifying sales and ensuring that no single customer accounts for more than 10% of their revenue. These strategies have allowed Sun to achieve a 26% market share in the United States.

Existing Policies

Sun Microsystems' primary aim is to enable customers to develop innovative business strategies utilizing their product offerings.

Sun Microsystems specializes in network computing products, solutions, and services that facilitate information access from any device and location. The company acknowledges the significance of information accessibility in today's business landscape and is committed to empowering customers with the necessary technology, innovation, and partnerships for seamless data retrieval. Sun Microsystems aims to leverage their network as a vital resource for customers to enhance their businesses through their offerings. Ultimately, their vision revolves around a future where customer-driven networked

computing prevails.

Sun Microsystems envisions a world where everyone has access to the collective planetary wisdom on the network. They believe that the internet is the gateway to bring their vision and ideas to life. Their mission is to maximize the power of the internet for their customers by offering their products and services.

Board of Directors

The board of directors consists of eight members.

Scott G. McNealy

Scott G. McNealy serves as the Chairman of the Board of Directors and Chief Executive Officer at Sun Microsystems, Inc.

McNealy is a Founder of Sun and has held various leadership positions since the company's incorporation in February 1982. He served as Chairman of the Board of Directors and Chief Executive Officer from April 1999 to December 1984, and as President and Chief Operating Officer from February 1984 to December 1984. Prior to that, he was Vice President of Operations from February 1982 to February 1984. Mr. McNealy continues to serve as a Director of the Company.

He is also a Director of General Electric Company.

James L. Barksdale

Managing Partner, The Barksdale Group since April 1999. He was President and Chief Executive Officer of Netscape Communications Corporation from January 1995 until March 1999, when America Online, Inc acquired Netscape. From January 1992 to January 1995, Mr.

Barksdale served as President and Chief Operating Officer of AT&T Wireless Services (formerly McCaw Cellular Communications, Inc.). Mr. Barksdale is also a Director of America Online, Inc., Federal Express Corporation, Liberate Technologies, Palm, Inc., The Robert Mondavi Corporation and Webvan Group, Inc.

L. John Doerr

General Partner/Managing Director, Kleiner Perkins Caufield & Byers Mr. Doerr is also a Director

of Amazon.com, Inc, Drugstore.com, Inc., FreeMarkets, Inc., Handspring, Inc., Healtheon/Web MD Corporation, HomeStore.com, Inc., Intuit, Inc. and Martha Stewart Living Omnimedia.

Judith L. Estrin

Chief Executive Officer, Packet Design, Inc. since April 2000. From April 1998 to April 2000, she served as Chief Technology Officer, Senior Vice President, and Cisco Systems, Inc. She served as the President and Chief Executive Officer of Precept Software, Inc. from March 1995 to April 1998. Robert J.

From November 1995 to November 1999, Fisher Member has been serving on the Board of Directors of The Gap, Inc. Prior to that, he held the position of Executive Vice President and President of the Gap Division from April 1997 to November 1999. Before that, he served as Executive Vice President and Chief Operating Officer of The Gap, Inc. from November 1995 to April 1997.

From July 1993 to November 1995, Robert L. Long served as Executive Vice President and Chief Financial Officer of The Gap, Inc. He is currently an Independent Management Consultant.

M. Kenneth Oshman

Mr. Oshman is the Chairman of the Board of Directors, President, and Chief Executive Officer of Echelon Corporation.

Naomi O. Seligman

Ms. Seligman is a Senior Partner at Ostriker Von Simson, Inc.

Seligman is also a Director of Dun & Bradstreet, Exodus Communications, Inc., Martha Stewart Living Omnimedia, and Ventro Corporation.

Top Management

The top management at Sun Microsystems play a crucial role in the company's success, resilience, and innovation. The common theme among them is their focus. When asked what has driven their success in just seventeen years, they provided the following responses:

Scott McNealy, Chairman of the Board ; Chief Executive Officer:

"Some companies change direction more often than I change

the oil in my car. Sun’s focus is right where it’s always been: the Net."

Ed Zander, President ; Chief Operations Officer:

“Our focus is simple: Be the number one provider of technologies, products and services that drive the Net economy.” Bill Joy, Cofounder ; Chief Scientist: “…it’s always been about the network…that’s our focus.”

Greg Papadopoulos, Senior Vice President ; Chief Technology Officer:

“All of our R;D…is dedicated to bringing the power of the Net to anyone, anywhere, anytime, on anything.” Sun has a strong dedication to bringing the Internet to people around the world.

The Net has always been the main focus for Sun, as evidenced by the consistent emphasis expressed by managers throughout the company. When asked about Sun's success, Scott McNealy, a fan of hockey, explained, "Our success is attributed to our focus. As Wayne Gretsky once said, 'Skate to where the puck is going, not where it currently is.'"

It is of great significance and excitement that a management team is able to agree upon and communicate the core values of a company as vast and prosperous as Sun to its employees. This applies to all individuals within the company, from the CEO to the intern. It is essential for everyone to be aware of what Sun stands for, and they indeed possess this knowledge. Additionally, Sun's management team demonstrates openness to adapt to the changing technological and social landscapes worldwide. They not only prioritize staying up-to-date with the latest technologies but also remain attentive to the desires of current and potential customers, both present and future.

However, the main focus is to ensure that every individual, regardless of their gender or age, has access to

the internet from any location. In comparison, Sun is like a fish's food, as they both symbolize something essential. This analogy does not suggest that Sun should be likened to the fish's lack of creativity. Instead, it emphasizes the fish's determination to change direction spontaneously for its own advantage.

Societal Environment

When examining the Societal Environment, it is crucial to analyze four key areas that influence a business entity's long-term activities. These areas include:

  1. Economic ~ primarily concerned with money and its transactions
  2. Technological ~ innovations and ideas for problem-solving
  3. Political-Legal ~ encompasses justice, regulations, and power distribution
  4. Socio-cultural ~ involves societal customs, morals, and values

The focus will be on discussing factors that directly impact Sun at the present moment in order to keep the information relevant.

The past month has seen some uncertainty in the Economic environment, largely attributed to the tumultuous presidential election in the United States. The stock market has witnessed a steady decline, thereby directly impacting investor confidence not only in the market but also in Sun. Sun tends to experience decreased investments during a market downturn, which is the case during this presidential election. Once the president is chosen and any legal matters are resolved, it is expected that the market will rebound to its pre-election state. Economists suggest that the U.S.

There may be a recession looming, which could potentially lead us into a depression if it is not addressed and reversed. Sun, like other companies, is experiencing the impact of this economic phenomenon through reduced sales and investments. The world is rapidly advancing technologically, with the U.S., Japan,

and Europe at the forefront. Consumers are adjusting to these rapid changes and, as a result, they anticipate more innovative products in a shorter timeframe.

Sun Microsystems has the potential to meet these standards as they have a well-funded R;D department. Based on their past products and their ability to adapt to changes in the technological environment, it can be assumed that Sun is highly capable of competing in the constantly changing technology market. However, Sun also faces various challenges due to political and legal factors. Anti-trust regulations such as the Sherman Anti-trust Act, lawsuits, and elections impact the economic, operational, and ethical aspects of the business. Currently, Sun is involved in a lawsuit against Microsoft.

Microsoft was allegedly licensed to use the Java platform, but instead, they modified it to be incompatible with Sun's Java version. As a result, Sun has filed a $35 million lawsuit against Microsoft. Additionally, anti-trust laws are overseeing Sun's market share to prevent monopolistic behavior similar to that previously demonstrated by Microsoft. Ethical, legal, and political issues can have an impact on Sun's operations. If they face setbacks such as losing a lawsuit or being accused of anti-trust violations, employees may become disheartened or feel threatened by rival companies.

The world's socio-cultural environment is increasingly accepting of new technologies, making Sun's products popular among people. Sun has witnessed fast growth in the past five years, indicating that societies worldwide are embracing Sun's concepts and products. However, users still have concerns about using the Internet for credit card purchases, suggesting that they haven't completely embraced the mission of technology companies to simplify consumer experiences.

Industry Analysis

The Internet/software industry is currently highly competitive.

Sun is competing

with well-established companies like Microsoft, IBM, Intel, and others. Despite being relatively new in the industry, Sun has managed to establish a respectable position among these giants. However, it is crucial for Sun to be cautious and adapt to the ever-changing industry environment. There are several current threats that need to be acknowledged. One of these threats is interest rate fluctuations. Currently, the market is stable in terms of interest rates due to the thriving economy of the United States (assuming a President is soon appointed). As long as interest rates remain low, investors will continue to invest in Sun. However, if interest rates suddenly increase dramatically, it can have a negative impact on Sun as investors may reduce their investments or sell their shares.

The risk of foreign currency exchange is a concern for Sun as it conducts business in different countries. The fluctuations in the currencies of these countries can impact Sun's profits and losses. However, as of June 2000, Sun estimates that the maximum potential one-day loss in fair value would be $27 million. This estimation primarily considers the Japanese yen, British pound, and the Euro.

Another significant development is the conversion to the Euro, which began on January 1, 1999, and lasted for 3 1/2 years. Many European countries participated in this conversion to adopt a uniform currency. Sun has taken various actions during this ongoing transition, such as reassessing currency risk, negotiating and revising licensing agreements, and managing tax and accounting records. These efforts aim to ensure a seamless conversion for Sun's international operations when Europe fully adopts the Euro.

In addition to currency and conversion-related factors, Sun may also encounter

threats from competing companies and legal challenges in its business environment.

The External Factor Analysis Summary (EFAS) has repeatedly highlighted Sun's adaptability to external environmental factors. This suggests that Sun will not be caught off guard by industry threats.

Corporate Structure

Sun's Headquarters are based in Palo Alto, California. The company also has manufacturing facilities, design centers, and sales offices in Europe, the Middle East, Africa, Japan, and other parts of the world. Manufacturing takes place in two countries and International Research & Development activities occur in nine countries (China, India, Japan, Ireland, France, U.K., Canada, U.S., Israel). International Sales, Service, and Support activities are carried out in 53 countries.

In over 170 countries, there are International Distributors. Sun is responsible for designing, manufacturing, marketing, and servicing network computing systems and software solutions that include networked desktops and servers. The Company is organized into multiple product divisions such as Computer Systems and Storage, Enterprise Services, and others. Each division is supervised by a divisional executive vice president who reports to the President of the Company.

In addition to the mentioned divisions, finance and administration, as well as other corporate groups, also report to the President of the Company. Products in the Computer Systems and Storage segment consist of a wide range of desktop systems, servers, storage, and network switches, which incorporate the UltraSPARC processors and Solaris Operating Environment.
Furthermore, Sun Microsystems' corporate culture is focused on providing products and services that can seamlessly work with any operating system, program, and Internet server or website. This dedication is an integral part of Sun's purpose and mission.

Sun's goal of providing universal Internet access and its humanitarian focus, combined with McNealy's management style,

have created a corporate culture that is both efficient and adaptable. This speaks volumes about the enterprise. Despite the world changing rapidly and demanding constant adaptation, Sun has been able to change its course effectively without losing sight of its main objective. When McNealy took charge in 1984, he began transforming the role of Sun Microsystems. Over the next few years, he gave the company the strength and foresight necessary for sustained success and growth. In 1986, after Sun went public and experienced its first quarterly loss, McNealy made the decision to reorganize the company.

He decentralized profit and loss responsibility to individual product organizations, referred to as planets, giving them a firsthand experience of any difficulties that may arise. McNealy's impact on the corporate culture is significant, with his personal characteristics reflected in the company's operations. Sun's corporate culture is built upon his motto: "Kick butt and have fun." This philosophy has positioned Sun as a formidable force in marketing and a workplace where employees can embrace a youthful demeanor. This culture promotes heightened productivity as work transforms into play, fostering an environment where employees feel integral to Sun's achievements.

Marketing

In 1998, Sun Microsystems implemented new graphics capabilities and introduced the fastest workstation in the market. This enabled them to gain market share from their competitors in the high-end market segment. To address the low-end market, they adopted a more aggressive marketing strategy. They launched a trade-in program called "Jurassic-Back," "Mac-Back," and "Paq-Back," which aimed to provide investment protection for their existing customers while attracting potential customers. The program specifically targeted users of Silicon Graphics, Apple Computer, and Compaq products. The goal was to promote the

use of Sun platform over other personal computers and workstations.

In November 1998, America Online, Netscape Communications, and Sun Microsystems joined forces. This partnership enabled Sun to expand its product range by incorporating Netscape's corporate and electronic-commerce software alongside their hardware. Netscape's software had already gained a strong reputation. Additionally, Sun became American Online's hardware supplier, solidifying its position as the largest online service. This alliance significantly bolstered Sun's reputation as a respected company in the market.

The decision to unite with a larger customer base was a significant marketing decision for Sun Microsystems, as it allowed them to expand the distribution of their software technology. In terms of finance, Sun's liquidity ratios indicate that they have sufficient current assets to cover their current liabilities. The current ratio is 1.4, showing that their current assets are enough to cover their current liabilities. The quick ratio is 1.33, indicating that they can cover their liabilities without including inventories. The inventory to net working capital ratio is 0.26, suggesting that Sun still has some cushion against unfavorable changes in inventory. The cash ratio is 0.39, demonstrating that they can cover their liabilities with cash or cash equivalents. Overall, Sun Microsystems has effectively met their current obligations with their highly liquid assets. In terms of profitability ratios, the net profit margin is 11.8%, meaning that 11.8% of after-tax profits come from $1 of sales. The gross profit margin is 52%, indicating that 52% of net sales are available to cover expenses after cost of goods sold has been fulfilled.

  1. Return on Investment (ROI) equals 16%.
  2. This demonstrates that 16% of the net profits after taxes are generated based on the total assets

used in the company.

  • Return on Equity (ROE) equals 31%.
  • This reveals that 31% of the net profits after taxes are generated due to the book value of shareholders' total.
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