

Q&A: Jonathan Schwartz on Sun's open-source business strategy - davidw
http://blogs.cnet.com/8301-13505_1-9757417-16.html

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davidw
I would be very, very interested to learn more about the numbers concerning
what they're doing. I'm pretty convinced at this point that service is just a
bad way of making money for a company, long term. Support might be a little
better, but you have to be pretty sure that they're paying more than they're
demanding of your time, which seems like a more difficult calculation than
simply selling a product.

Actually, as someone who really loves open source, I'm thinking the model
that's most interesting right now is the google/37signals strategy of using
lots of OS, and contributing back to it, and making money with the 'tip of the
iceberg' that you keep proprietary. Who knows, though... it's still something
that's too new to know how it will all work out.

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mattculbreth
Good article. I agree that Sun is coming back strong. I've got a Sun Fire
x4100M2 on the way as part of their Try and Buy program. When you join the
Startup Essentials program the prices can be lower than Dell's for better
equipped hardware.

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staunch
Coming back strong relative to dying perhaps. Sun is still in the business of
significant overcharging. Their history of selling things at 1000%+ markup is
hard to give up.

I've overseen the purchase of millions of dollars in server gear over the past
few years and frequently had Sun quote me a price. The closest they've ever
come to beating Dell, Rackable, or my no-name suppliers is trying to sell me
other customers canceled orders. Buying Sun's stuff is like buying Apple's
server gear: not the best use of your money.

They're super generous on eval hardware and trying to lure you in. They still
have cut throat sales guys who will try to screw you in various high profit
margin ways for the sake of their commissions. Dell sales is all business,
efficient, and totally straight forward.

If Sun went out of business tomorrow the Open Source world would barley
notice. I like Jonathan Schwartz, but that's the reality. He should split the
company in half, one half to clone Red Hat's model and one to be the The Old
Sun and milk the legacy cash cow.

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mattculbreth
Good post, and I'm definitely familiar with pushy hardware sales dudes.

Given all that though, my previous post still stands. The prices I'm quoted as
part of the Startup Essentials program are lower than Dell's. I'm looking at a
few web servers, a DB server, and a storage unit and it's coming in at 85% of
the Dell cost. The servers seems a bit nicer too in the components (CPU speed,
number of RAM slots, etc.)

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staunch
Check Silicon Mechanics, Rackable.com, or just forward Dell your Sun quote and
have them beat it if you want. For a small amount of gear though it doesn't
really matter much. I'm certainly not saying Sun makes bad stuff either (they
do overstate their differentiation though), just that they charge a premium
like Apple does.

