The top 10 reasons due to which Sun failed

Sun Microsystems - once upon a time a $200 billion company and the owners of Java was bought out by Oracle for $7.4 billion a few days back.

Dan Baigent, was a senior director at Sun microsystems when the company got acquired. He started out to write the top ten reasons why Sun failed. Unfortunately he could write only 3. The company cracked down on it and took the posts off. However, the good (?) google is here to help us.
It has stored a cache of those pages.

The top 10 reasons why Sun failed to leverage its market potential. (Only #10, 9 and 8 are there, Dan never got to write more than that.)

The #10 Reason that Sun is Setting: We failed to understand the x86 Market - "We approached the market in the only way we knew how - as an extension of our high-end, low-volume, high-value approach to network computing. And not just in terms of product features and capabilities, but in terms of sales, partnerships, channel programs and supply chain management."

The #9 Reason that Sun is Setting: Messing with the Java Brand - "numerous attempts by well-meaning marketing folks at Sun to try exploit the value of the Java brand itself and how that ultimately reduced the very value they tried to exploit. To some degree, this is as much about the lack of value in the Sun brand (at least outside our loyal customer base) as it is about Java" ".... and the changing of our stock symbol to JAVA . (It) was a sad attempt to make Sun's stock more recognizable on Wall Street, as if that's what we created the Java brand for."

The #8 Reason that Sun is Setting: Fumbling Jini - "The real problem was that the engineers had built this technology using the latest Java platform...When launched, Jini could not run in anything smaller than a device with 64MB of memory and a Pentium-class processor.... Meanwhile, Marketing and PR were off describing uses of the technology that were all about small devices (cameras, printers, cell phones, etc.) that were completely unable to run RMI, nonetheless the Jini on which it was built. Jini should have been first-and-foremost about distributed computing. ... worse still, we left the door so wide open on distributed computing that Microsoft and others were able to walk through it."

Probably Sun does not believe in learning from mistakes or worse, thinks that letting the mistakes out in the open could mean lower respect for the brand image. The only way that is possible is when while knowing your mistakes, you still go on commiting them.

Business Scalability in the Manufactoring sector

As promised earlier, here's my post on how to shape your business for scaling up, if you are in the manufacturing domain.
Most of the articles that I have read talk about up scaling the business in the web or the software domain. None really talked about applying the same principles to achieve scalability in business in the manufacturing domain.

I strongly believe that the principles of business scalability transcend the boundaries of the business domain. When we say that we need to structure the business model for scalability, we need a revenue model that is self perpetuating. One first needs to find out who the customer is. The next thing to figure out (and this is the most important thing) is to figure out what is it that will further your product's demand. And create your revenue model based on these answers.

Now lets focus on the manufacturing industry, If lets say it is a electrical machines manufacturer - that specialises in precision control. The company would probably then want to create a assembly line type product chain. So that each product sold in the market would create demand for more similar products. (If you want to have a more detailed/customised revenue model, you will have to pay me)

Logic of a "free" customer

For the past few days, I have been thinking about how much is a 'free' customer worth.
For example, All the social networking sites like Facebook, Orkut, MySpace offer free logins for anyone. Similar is the case for eBay.

For example on eBay, all buyers are free registrants . Only the sellers pay - and that too when they get a product to sell. This gives rise to an interesting situation - without 'free' buyers, there are no sellers - and without the sellers the revenue model fails.

Similar is the case with Orkut - without the free users, there are no ads, and hence no money. But its slightly complicated here as Orkut is owned by Google. so there might be opportunity costs involved. like for example, when someone clicks on ads by google from a third party site, google must be paying something to that site as well (as it does in adsense). So when Google values its Orkut users, it will also factor in these savings.

Facebook epitomizes this type of revenue model - it allows advertisers to select their target group very effectively. Allowing them to streamline their ad via features such as
* Location
* Age
* Sex

* Keywords
* Education
* Workplace

* Relationship Status
* Relationship Interests
* Languages



But exactly how useful are these customers? there might be some customers who never click on any ads. Or for that matter, sell products on eBay. So these people never make money for the company. On second thoughts, these might still generate some revenue for eBay - by increasing the selling price through competitive bidding.


This thought cropped up in my head while listening to a presentation on the revenue models followed by browsers. Since then I have not been able to stop thinking about it. So HAD to publish it. Anyone who has some idea on this, please do comment/ contact me. I wish to learn more about this fascinating concept.

Scalability of business

Just read Anurag Srivastava's note (on facebook) dealing with scalability of business and life in general.

He writes
" .... what keeps one going is not the regular earnings that you get from the business which in a typical year is predictable - but possibility that there can be a time when all things will go right and will payoff exponentially. Every one who gets into business does it with that hope - that if all things go right - there will be a windfall ..."

I am not very sure about the comment about the "typical year" claim - all of us have seen how the markets crashed within a very short time. We are talking about black swans here. He seems to look only for the positive abnormalities but (probably because he is a die-hard optimist) prefers to overlook the tough times.

Though the expectation part is very valid - no one wants to do something that will remain mediocre all along. Its only the faint hope of greatness that drives the men.

Further he adds
"... where the business scales up purely on creation of a design or an idea that gets replicated easily and you get paid for every unit that gets produced by anyone through a license. So the Chinese might have factories which make the Nike shoes and scale up production as per what Nike wants and make incremental profits - Nike has to design and market those shoes to make exponential profits without too much extra investment on capital or humans. Ideas and intellectual property is scalable , bodies are not. Running a hotel is not scalable but the format/franchises are ..."

Here he makes a very interesting point. All of us knew it somewhere at the back of our heads but it still is a revelation when one first gets to see it articulated. Its the idea that can bring a turn around. In my opinion, the distinguishing feature of a scalable business is the fact that an additional unit is not accompanied with diminishing returns.

PS- More on business scalability in the manufacturing sector here.