SUN (the company) being Innovative
Friday, August 24, 2007
Interesting move: changing the trading symbol from SUNW
What does this change have to do with technology, or innovation, or marketing? Not much, I think.
Now, spinning off the Java platform into a separate company would definitely be a gutsy, if not a crazy, move. And I say crazy, because what SUN is signaling the market is that without Java there is no SUN. And this is a problem, which I will get to at the end.
Apparently, not everyone thinks this is a good idea. Steve Collins, for example, wrote in Schwartz's blog
Jonathan, this is one more indication the board needs to look for someone with REAL ideas to lead a once great company. You're all driving wonderful technology innovative and real engineers designed in the ground. You're just a marketing weenie.
No one can deny that this is a good PR move, but hardly the most revolutionary tactic of all times. Someone will come up with a better trading symbol. I can see it now, "Hey, why don't we change our trading symbol to 1337? Can I get my performance bonus now?"
By the way, Schwartz thinks that teenagers care where their technologies come from. He writes: "Ask a teenager if they know Java, and they'll point to their favorite mobile applications, the video uploader [sic] for their social network, or their game console." Really? Show me the statistics. I really want to see the empirical evidence of that statement.
I do think that some teenagers (and I mean the minority) may know what Java is (and probably just that it is a programming language, and only because they use it in their high-school programming class). As for the rest, they just care that their applications do what they are supposed to: ring and take calls; download music and movies (which is illegal in some countries); send and receive text messages; etc.
Most non-technocrats view information technologies as a utility that should just be there and work. And why shouldn't they? We've been telling them so for a long time now. Not long ago "The Network Was the Computer." That says to me that CPUs of all speeds and RAMs of all sizes should just be there and be ready to compute at will, regardless of the platform it runs in. Isn't that the point of the web as a service platform, technology agnosticism?
As for examples of web utilities, I can think of two. First, google is one the best web platforms to date--note that some applications are probably written in Java, but not all of them. And second, the rave now a days, Facebook--the core application is written in PHP. In both cases, nobody cares what technology is used to display videos on youtube, or sending annoying application invitations on Facebook. Well, at least I don't. I really just want to search, view maps, view photo albums, and read friends messages.
Now, coming back to the problem this move represents for SUN. Java is definitely important in the technology world, but I wouldn't say it has "near infinite [value]," as Schwartz wants everyone to believe. He knows that every technology goes through a predictable life cycle
, which is represented as an S-curve. Sure, right now it feels as if Java will just keep on giving, but the point of saturation will come and the law of diminishing returns
will kick in. This means that a new and better technology will become available, overlapping Java's technology adoption S-curve. What then? Change the trading symbol again?
So it should be clear that when that time comes SUN will be in trouble. For example, imagine that the new platform of the future, lets call it YAVA, is in fact better, faster, and cheaper to implement than Java. In our imagined future, Java will become a synonym for expensive, outdated, and bad technology. Who would want to invest in a company with that trading symbol? The very strategy to take advantage of the Java branding could backfire.
It can be argued that this grim future I just portrayed will not come true because Java will just keep getting better, and therefore this is not a problem for SUN. Well, not so fast. On the one hand, something better always comes along--it's the nature of our economic system: creative destruction. On the other hand, SUN doesn't have infinite resources to keep making Java better and better, and it is unlikely that it will invest everything they have into only one technology--it doesn't make sense, and it goes against every fibber of every CFO's being: a one technology company, a well diversified corporate portfolio does not make.
Either way, this change may turn out to be expensive in the long run. Either Java becomes outdated (and it will), or SUN invests everything they have into Java (which, Schwartz said they won't: "we are Sun, we are a systems company"). Of course, right now Java can do no wrong, and the change will be applauded by all. It's a brand equity thing that we non-marketing folk don't understand. Or do we?