Commentary on Commentary

Mr. Enderle, who focuses on personal technologies, suggests that Sun buy Gateway. It's pretty obvious from his article that he is not a fan of what Sun is doing. I think some commentary on his commentary is appropriate to clear up some misconceptions he may be spreading.

On the thought of a Gateway acquisition, I'm not going to bite. I don't see anything productive coming out of that discussion. However, I do want to focus on some of his "orthogonal" points. First, morale.

On the morale point, well, I am not sure how many data points Mr. Enderle has. 1? 10? 50? All I can give you is one. Mine. I had a strong lead for a new job as another company contacted me gauging my interest. My response? Almost verbatum: "First, I'm not interested. Next, what's the job so I can talk to my personal network and filter their skills/interest for you." A Sun-friendly person in a pre-sales role selling cross-platform products? Heck yeah! My personal network has at least as many non-Sun employees as it does Sun employees, so don't read between non-existent lines. This is a pretty darn exciting time as we open up much of our intellectual property portfolio to the world. And we get to blog about it. Now that I am spoiled, I don't know if I could work for a company that didn't give me this much freedom to express my thoughts. Leave Sun? Are you kidding?

On the Sun Ray topic, Mr. Enderle's data may be true to a point. In our sales office we happened to have some servers that were getting long in the tooth. Things were getting somewhat slow simply because you can't push a 400Mhz CPU faster than 400Mhz (not entirely true, but we value supportable configurations). We have upgraded those E4500's in the office to v440's. Now our apps run just fine. My point? Sun Rays are not slow. Servers have to be sized properly. I'm sure most of you have had desktops that have gotten pretty slow and you have also had them upgraded. It's the traditional 3 year upgrade cycle. The only difference in our case is that we upgraded 2 servers and the 100 desktops just ran faster. Our upgrade cycle happened to be 5 years, probably a year overdue but, hey, IT has a fixed budget with a lot of things on it's plate.

If there's commentary, there is most likely commentary on commentary available as well :)

Comments:

Your boss McNealy said "I'm a Stanford MBA, I went to most of my classes. I took accounting. I can't read annual reports, income statements and SEC filings any more. They are absolutely undecipherable," (http://accounting.smartpros.com/x40821.xml).

Well, I'm a Rotman MBA and went to damn near all my classes, and way back in 1998, my Financial Accounting study group compared Sun to SGI. Our conclusion at the time was that Sun was a financial powerhouse. Lots of cash, little debt, good free cash flow.

So I took a look at the latest annual report, and I still see the same thing. I just can't see how a company that has $1.7B in FCF (don't quote me on that, I admit I had to pull out the old textbook to find the calculation and I might have got it wrong) can be called "in financial trouble". Says more about GAAP than Sun if you ask me.

Full disclosure: I'm not an analyst and I also own about $40 of Sun stock (used to be a little more...I'm still holding out for the recovery.)

Posted by Greg Trasuk on July 20, 2005 at 03:45 AM PDT #

Notice how this guy sais a lot of stuff like it was a joke and "it's not the point of this article" like "moral at Sun is very low" and "SunRays are slow". Since Scott Adam's Dilbert I hadn't seen such an obvious case where "informed sources" = "I just made it up and it looks fine in an article"

Posted by Jaime Cardoso on July 20, 2005 at 04:11 AM PDT #

+1, well said, me too :-)

Posted by guest on July 20, 2005 at 04:47 AM PDT #

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