Sun Microsystems Strategic Positioning

INTRODUCTION

Over the last 26 years, Sun has built a strong business strategy to satisfy commercial and consumer buyers with multiple products.

When it all comes down to it, Sun Microsystems is one of the most defined and trusted computer manufactures in the globe. This thesis paper discusses the achievements of Sun Microsystems, Inc. Chapter 2 looks into the history of Sun Microsystems. Chapter 3 reviews the choice marketing strategy of Sun and how they have improved their current business position. Chapter 4 examines what products Sun provides consumers in software, storage, desktops, workstations, and microelectronics. Chapter 5 discusses the business code of ethics policy. Chapter 6 explores the legality of Sun Microsystems. Chapters 7 through 11 discuss the international facility of Sun Microsystems in Milan, Italy and chapter 12 explores their global business strategies.

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CHAPTER 2 SUN MICROSYSTEMS: HISTORY

In 1982, four people got together and built Sun Microsystems, Inc. in Santa Clara, California. The latest date of 2007 annual reports confirms this company now has 34,000 employees worldwide. According to Hoovers, the top three executives are Jonathan I. Schwartz, President, CEO and Director, then Scott G. McNealy, Chairman, and then Gregory M. Papadopoulos, EVP Research and Development and CTO. (Hoovers, 2008)

Since 1982, Sun Microsystems has believed, “The Network is the Computer” to achieve their company success. History In 1983, Sun made enough revenue to open operations overseas in Europe. (Sun, 2008) This new overseas office gave many capabilities to what Sun could accomplish. For example, Sun opened their doors in multiple international countries to build revenue. The first international operations for Sun opened in Canada in 1985 (Sun, 2008).

The following year, operations started in Asia then in Australia. Sun, 2008) In 1988, Sun reached their first $1 million dollars in sales revenue, which is a major milestone. (Sun, 2008) In 1990, Sun introduced the first workstation which was a new plateau reached. (Sun, 2008) This workstation brought new strategy into Sun’s marketing strategy because of opportunity it added. Continued Growth In the late 1990’s, Sun expanded their business horizons into hardware then built a T1 server which handled the backbone of the Internet. (Sun, 2008)

That same year, Sun completed the Micro, Standard, and Enterprise editions of the Java 2 platform 2 Comment [US1]: Period follows citation not before application. (Sun, 2008) Java software gives opportunity to developers they previously did not have. This software allows programmers to develop and build ideas more easily. Java is used in web browsers to this day, so it is important to ensure that application stays updated as required.

CHAPTER 3 SUN MICROSYSTEMS: MARKETING

The marketing strategy of Sun Microsystems did change as the company increased the product line because with additions they needed to build a correct strategy. The reason for changing the marketing strategy is to compete with businesses just like them. Sun Microsystems has always ensured that their consumers receive the best products and the best in customer service. In 1992, a great marketing strategy used by Sun was to join with Hewlett Packard and announce new workstations built specifically for technical businesses.

As the author of Computerworld magazine stated, “The companies are pitching their workstations to different customers--Sun wants to displace PCs from commercial desktops and HP is focusing on the midrange and high-end workstation user. (Johnson, 1992, 4)

SWOT Issues

Just like any other business, Sun has strengths, weaknesses, opportunities, and threats. Keeping those four key points in mind will provide Sun the assistance they need to further their possibilities in the world of technology. Sun was able to acquire the program application MySQL. In many technical circles such as networking, the word “lamp” will be used during a discussion between administrators. An IT article explains how these letters are also read. The letters of lamp each stand for an application used to build a network server; Linux, Apache, MySQL, and PHP.

Anonymous, 2008) Microsoft vs. Sun Microsystems Microsoft is a company that many consumers know for the popular operating software they provide, Windows. Some may not be aware of legal issues that had taken 4 Comment [US2]: Magazines and newspapers are in italics  place between Microsoft and Sun regarding the Java application. A 2004 article put many business owners at ease when the authors stated, “Just before last Christmas, secret talks aimed at ending one of the bitterest wars in business foundered. (Guth & Clark, 2004, A1)

The disagreement began on October 1997 when Microsoft was sued for using Java incorrectly. In January 2001, Microsoft and Sun did reach an agreement finally to settle the 1997 case in which Microsoft paid Sun $20 million dollars. (Guth & Clark, 2004) The settlement of this case actually allowed both companies to move forward without regrets. On March 10, 2008, Microsoft and Sun Microsystems met once again and this time it was on better terms. Both companies created an alliance including the grand opening of the Sun/Microsoft Interoperability Center.

The center is located in Redmond, Washington, the same location of the headquarters for Microsoft. One benefit this center received was the type of Sun server and storage system. The other benefit was the type of Microsoft server software. (Johnson, 2008)

CHAPTER 4 SUN MICROSYSTEMS: PRODUCT TECHNOLOGY

Software Sun provides many options to consumers when choosing from software. It is not just operating systems. Sun provides Java and Java Enterprise Systems to the consumers. Consumers have the ability to use Mobile Solutions when they are away from their away from their main computer.

Business management software is available on levels of security for identity management or systems management. Software tools to assist database maintenance, application management, and development production are also available.

The latest version of Solaris is Solaris 10 and it was released in 2004. (Sun, 2008) Servers Sun Microsystems has been busy improving since the original SPARC came onto the market. Now consumers have multiple options within this category to chose. For example, a consumer could choose a “Blade” server, the “x64” server, a Netra server, a SPARC erver, an Entry Rack Mount server, a Mid-range server, or a High-End server.

Each product has advantages and disadvantages that will match up to a consumer’s needs. If a business still needs to consider options, the Sun web site performs a comparison of the servers. If a business needs something more customized, Sun will provide rack cabinets so the business can build a specialized rack system to meet their own needs. History Conclusion Sun Microsystems provides more than software, main frames, and rack systems to the consumer. Over the last 26 years, Sun has built a strong business strategy to satisfy commercial and consumer buyers with multiple products. Sun is a business that believes the best way to earn revenue is to stay focused on important issues. Keeping focus on business strategy and consumer needs will turn growth and revenue into prosperity.

CHAPTER 5 SUN MICROSYSTEMS: CODE OF ETHICS

In 2001, Sun Microsystems built a Business Conduct Office (BCO) to assist employees and board members as necessary. (Corporate, 2008) To ensure employees are assisted in the best possible way, Sun keeps this document consistently updated.

An employee can contact the human resources department should they have any questions or concerns. Employee Code of Ethics After employees are hired, they are provided with documentation listing a helpfully written ethics policy each person is required to follow. As an employee, a person is expected to use common sense in the decision-making process. More importantly, Sun requires each employee and board member to follow these company ethical guidelines: “Be familiar with these Standards of Business Conduct and follow them at all times.

Comply with all applicable governmental laws, rules, and regulations in the performance of their duties on Sun’s behalf. Be sensitive to situations which could lead to inappropriate business conduct and avoid engaging in such inappropriate business conduct. Comply fully with the letter and spirit of Sun’s Conflict of Interest policy and always conduct Sun business in a manner that avoids conflicts between personal interests and Sun’s best interests. Promptly bring to the attention of appropriate Sun management or Sun’s Business Conduct Office any known or perceived unacceptable business conduct or illegal behavior.

Seek appropriate guidance when it is suspected that business conduct issues. Always conduct Sun’s business with honesty and integrity and refrain from conduct that would negatively impact Sun’s reputation. ” (Sun Microsystems, 2007) Employee Relationships Businesses must build a working relationship between their employees just as they do with their consumers. It is also important for employees to know they will always have the respect of their employer at all times. Employees are expected to return the same professional conduct as a courtesy to their employer.

In addition to professional standards, Sun has a global anti-discrimination policy that protects employee rights. This anti-discrimination policy serves dual purpose because it protects an employee’s rights and it prevents discrimination within the company. Anti-Discrimination Policy In the anti-discrimination policy, there are four types of harassment examples. They are verbal harassment, visual harassment, physical harassment, and sexual demands. (Sun Microsystems, 2007) An example of verbal harassment is co-worker insults another with explicit jokes or makes sexual remarks towards another person.

Visual harassment is considered graphic material whether it is written, printed, or sent through email. Physical harassment is considered more sexual driven as a person intentionally brushes up against another in a way that is unwelcome. Sexual demands are defined as unwanted sexual advances.

CHAPTER 6 SUN MICROSYSTEMS: LEGAL ISSUES

Sun Microsystems has a legal department that has the capability to work through multiple situations. For example, Sun took legal action against Microsoft after discovering their Java code was used to advance Microsoft’s Internet Explorer.

After Sun and Microsoft ironed legal differences in front of a judge in 2004, both companies emerged with new ideas. According to a 2007 article in the Wall Street Journal, “Sun has agreed to sell servers that come with Windows installed at the factory. Some customers already run Windows on Sun's x86 systems -- those that use chips from Intel Corp. and Advanced Micro Devices Inc. -- but had to buy and install the software themselves. ” (Lawton & Clark, 2007) The executive vice president of Sun’s systems group stated, “This is quite a different situation. (Lawton & Clark, 2007)

It is obvious seeing Sun and Microsoft business activities they can become allies and begin build something new to benefit the consumer. Hardware Patents Another legal issue was resolved between Sun and a company named Custom Hardware Engineering over a patent dispute. Financial Wire briefly explained this suit in an article because of the delicate legal information involved. This independent service stated, “Custom Hardware had filed an antitrust counterclaim against the charges and was seeking $140 million in damages. ” (FinancialWire, 2007) Sun settled the counterclaim with an amount that has not been disclosed.

Because Sun purchased this hardware company, Sun in turn legally owned all rights however; one could possibly see why Custom Hardware attempted to sue for counter damages.

CHAPTER 7 SUN MICROSYSTEMS: INTERNATIONAL COUNTRY ANALYSIS (ITALY)

This section of the Sun Microsystems research paper discusses the international facility. The global center is located in Milan, Italy. The international center provides consumers the exact services that American customers receive. This section provides economic details of Italy such as employment and unemployment.

Other information discussed is things pertaining to demographics and the future of how Sun can progressively build its facility in the country. Over the last 26 years, Sun Microsystems has built a strong business strategy to satisfy commercial and consumer buyers with multiple products. When it all comes down to it, Sun Microsystems is one of the most defined and trusted computer corporations across the globe.

CHAPTER 8 SUN MICROSYSTEMS: INTERNATIONAL ENVIRONMENT

Sun has built a center in Milan and it is called the Solution Center. They believe it will “expand business opportunities, lower development costs, and get products to market quickly”. (Sun, 2008) Customers can choose from products such as Solaris and Linux servers, desktop computers, and other types of storage peripherals. Four services available in the Milan Solution Center are proofs-of concept, benchmarks, product and solution demos, and porting. (Sun, 2008)

International Economy Results In Italy, the first economic quarterly period was reported as $387,952 million Euros. It was showing a 0. 7% change from the previous quarterly period with a 1. 9% change from the previous year. Italy, 2008) As of May 2008, the employment rate status was 23,229 and the unemployment rate was 6. 5%. The total imports of goods and services in May 2008 amounted to $40,150 million Euro.

Total exports of goods and services in May 2008 amounted to $39,688 million Euro. SDDS data reported the revenue of 2007 being $724,246 million Euro. (Italy, 2008) The Sun facility is located in Milan, Italy. Domestic Economy Results As of August 2008, Sun Microsystems reported its fiscal results. The revenue for the fiscal year was $13,888 billion. Revenue results for Q4 of fiscal 2008 are $3. 780 billion.

Net-income for the fiscal 2008 earnings is $88 million. Cash earnings from operations of fiscal year are $1. 3 billion. ("Sun Microsystems," 2008)

CHAPTER 9 SUN MICROSYSTEMS: INTERNATIONAL DEMOGRAPHICS

On July 2007, a census reported the population of Italy to be 58,147,733 residents approximately. (Intute-World Guide, 2006/2008) The total residents in the labor force as of 2007 were 24. 86 million. The exports of Italy are engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals, food, beverages and tobacco, minerals and nonferrous metals.

The country of Italy has boundaries to Austria, France, San Marino, Slovenia, Switzerland and the Vatican City including a coastline that ps 7,600 kilometers. (Intute-World Guide, 2006/2008) There are eight seaports, Augusta, Genoa, Livorno, Ravenna, Sarroch, Taranto, Trieste, and Venice. Italy has one gas pipeline and one oil pipeline. Two types of railways and 612 merchant ships are available to carry commercial or industrial cargo. (CIA-The World, 2008)

Population According to The World Fact Book, the population of Italy was 58,145,321 as of July 2008. The median age of the male was 41. 4 years. The median age for the female was 44. years. The census of 2001 showed literacy rate for the male population as 98. 8% and the literacy of the female population as 98%. In a census as of 2006, school age expectancy for males was 16 years and school age expectancy was 17 years for females. (CIA-The World, 2008)

CHAPTER 10 SUN MICROSYSTEMS: INTERNATIONAL POLITICS

According to the Maps of the World, there are three government components in Italian politics executive, legislature, and judiciary. (Government and, 2008) The executive area is in essence the Prime Minister while judiciary has control over legal power of the country.

Italian citizens are permitted to vote at the age of 18. They can choose from a multiple list of governmental parties listed in Appendix B. (Government and, 2008)

CHAPTER 11 SUN MICROSYSTEMS: INTERNATIONAL SWOT

Even though Sun has a facility in Italy, a SWOT analysis must be followed to ensure business operations move smoothly. SWOT analysis is defined by Bnet. com as, “an assessment of Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is used within organizations in the early stages of strategic and marketing planning.

It is also used in problem solving, decision making, or for making staff aware of the need for change. It can be used at a personal level when examining your career path or determining possible career development. ” (Cnet Networks Inc, 2008) In essence, the SWOT analysis is used to guide a business with structure and conformity. SWOT Analysis The SWOT analysis shows how strengths and weaknesses are internal whereas opportunities and threats are external. Using that philosophy, Sun must keep track of strengths or business advantages at their Milan facility.

Sun should consider how to improve the current business status by increasing revenue in the technical market. When a business keeps aware of opportunities, it can improve their status. A few examples provided by QuickMBA. com are, “an unfulfilled customer need, arrival of new technologies, loosening of regulations, and removal of international trade barriers. ” (Swot Analysis, 1999/2007) For example, currently Sun has a few facilities with trade barriers so should they be lifted that will allow easier delivery of product and building of revenue.

Furthermore, Sun has 10 General Prohibition restrictions with specific countries and customers. (Sun Microsystems, 1994/2008) These restrictions protect Sun as well as their employees.

CHAPTER 12 SUN MICROSYSTEMS: GLOBAL BUSINESS STRATEGIES

The three strategies business owners can choose from when determining what will work best for their business strategy on a global scale are multi-domestic, global, and transnational. The multi-domestic business strategy focuses on all overseas countries the firm has operations.

The global strategy focuses on how products are delivered to the countries. According to Cangemi, “a transnational strategy seeks to combine aspects of both multidomestic and global strategies in order to emphasize both local responsiveness and global integration and coordination. ” (Cangemi, 2008) Five Business Level Strategies Sun builds benefit from the five business level strategies that are cost leadership, differentiation, focused low cost, focused differentiation, and integrated strategy. Sun recognizes five items their business could face while attempting to improve.

These items known as Porters Five Forces are competitive rivalry, power of suppliers, power of buyers, threats of substitutes, and threats of new entrants. A visual of Porters five forces is displayed in Appendix A. (Recklies, 2007) Albert Einstein once said, “Try not to become a man of success but rather to become a man of value. ” (Success Quotes, 1994/2007) Sun delivers value to their consumers both domestic and international. Sun has grown to a successful business because of their continuous years of hard work from the CEO and all employees.

Sun has proven to succeed in business it takes dedication, communication, and the willingness to work outside of the box.

CHAPTER 13 SUN MICROSYSTEMS: CHANGE MANAGEMENT

Since 1982, Sun Microsystems has followed a structured business plan of goals for company products, services and higher revenue earnings. The 1980’s was a time for many companies to begin automating their systems. While some companies were just beginning to automate, Sun introduced its first workstation for businesses. In 1983, Sun opened the first facility overseas in Europe to expand products and increase revenue.

Server Management In 2000, Sun customers who purchased high-end servers experienced a memory glitch error. Because of the error’s location, a statement was released on anonymity. The CIO stated, “Sun has taken an aggressive approach to addressing these issues with our customers. We have identified the source of the problem and taken steps to ensure that it does not happen again. ” (Wagner, 2000, 10) Executives have said even though consumers were requested to sign a nondisclosure agreement to protect proprietary information, Sun plans to releasing a system board before the New Year that should resolve this error.

Just as a gardener pull weeds for vegetables growth, Sun executives train personnel so they can grow within the business and excel.

CHAPTER 14 SUN MICROSYSTEMS: STRATEGIC CHANGE

In December 2002, Sun Microsystems accomplished one more business goal after automation of their data center. Gordon Haff, analyst at Illuminata explains, Making effective use of data-center assets always has been an issue, but it's been exacerbated by the technology build-out of a few years ago.

People would be very happy with a magic solution that allowed 1,000 servers to be managed as easy as one server, but that doesn't exist today, software developments such as IBM's Project eLiza, Hewlett-Packard's Adaptive Management Platform, and Sun Microsystems' N1 are steps in the right direction. (Greenemeier, 2002) Product Upgrade In April 2004, Sun Microsystems performed a product upgrades to Linux that provided business consumers desktop ease. This Linux version provides a newer version of Enterprise Java desktop. Not only that, system administrators can now control the entire desktop from a central platform.

Chris Maresca, senior partner from Olliance Consulting states, “The desktop is one of the largest cost components of any modern corporation. When you layer on top of that the cost of server-based productivity apps tied to desktops, like Exchange, and you factor in the support costs for the desktops, servers and updates/security patches, plus mandatory hardware upgrades every few years, [the migration case] becomes even more compelling. ” (Rooney, 2004)

Storage Management

In 2004, an upgrade that brought positive results to Sun was in the data management department. Sun announced the products StorEdge 6920 and Sun StorEdge 9990 storage devices. Marc Canepa, executive vice president of Sun Microsystems storage products says, “We don't think of storage as a separate company that just happens to be owned by Sun Microsystems, just like we don't believe that the strategy to reduce cost and complexity is one of going to a customer and taking over the whole operation. ” (Fonseca, 2004) Open Source Management The strategy for this project has increased as time progressed because it is a very important product. An example of this is Sun classifying commercial open-source business strategies into four categories.

Driver, Feinberg, and Weiss listed them in a Sun Microsystems Open Source 2008 report as: Sponsor open-source projects and solutions as an active member of a community, leverage open-source software embedded in other products and services, support and integrate selected products and services with open-source solutions, and provide direct, commercialized products and services of open-source solutions. (Driver & Feinberg, 2008)

CHAPTER 15 IMPLEMENT PLAN OF CHANGE

Sun Microsystems provides a vast amount of products, which support multiple needs of customers.

To ensure the best strategy, Sun Microsystems must implement a plan to improve their current strategic position. When a business uses one strategy continuous, employees tend to become complacent then fall into a comfort zone. When Sun implements a new strategy, they could experience some resistance from employees because they did fall into that comfort zone. Implement Change When a business is ready to improve, management needs to be aware of three things, people, communication, and training. As John Kline explains in his article, “Implementing organizational change is a difficult and critical task.

It has always been that way and is getting more so with the accelerated rate of change in most organizations. ” (Kline, 2007) Employees must be aware of the changes made and how it will affect them. It is important for managers to stay communicated with their staff and keep them informed of any changes as they take place. During the process, managers should be training employees so they are prepared for the new conversion.

CHAPTER 16 IMPROVEMENT RECOMMENDATIONS

Sun has a scheduled budget for research and development. The current strategy has allowed this company the ability to build a strong position in technology. Sun purchased a software company to complete a software collection for service-oriented architecture (SOA). Unfortunately, since this purchase Sun has not regained any lost ground.

Sun must research what is currently available for storage management software and reconsider improving the plan for usage in mainframe systems. Sun should make a plan of time to review servers being sold. For example, newer technology will allow the company to provide things which older technology could not.

A question Sun Microsystems must consider is how to manage replacements of damaged servers from customers when those particular servers have been replaced with newer models. Perhaps it is an opportunity for Sun to offer their customers a discount in such cases. In conclusion, Sun has built a strong business strategy to satisfy commercial and consumer buyers with multiple products. Because marketing is their responsibility, they must track sales and competition then readjust as necessary. Sun Microsystems is a defined and trusted computer corporation that international and domestic markets will work with.

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