Re: Sun nearing bankruptcy ... better buy VMS Andrew!

From: Andrew Harrison (andrew_._remove_harrison_at_su_n.com)
Date: 03/19/04 

Date: Fri, 19 Mar 2004 20:49:05 +0000

Fred Kleinsorge wrote:

> "Jack Pea***" <pea***@simconv.com> wrote in message
>
>
>>This "revelation" comes from a race tout^W^W stock analyst. In general
>>their credibility ranks somewhat below that of astrologer. However, I
>
> will
>
>>consult the I Ching as soon as possible to see if it agrees with this
>>prognostication of doom.
>
>
> Well... While that might apply to commentary in the Inquirer - the rating
> of debt has a little more structure and reality around it.
>
> As I've said in the past, Sun is in a lot of respects an echo of what
> happened at DEC. I have contended (while tipping a pint) that DEC might
> have recovered and rebounded had it "stayed the course" - it had something
> like $4 billion in cash, almost no debt, and was losing money at a rate that
> it could have gone many years before it ran out of cash. The
> "restructuring" cost more money than we were losing. Sun hasn't been
> profitable in 2-3 years, and it is showing the strain - it's stock price and
> debt ratings reflect it. The question is if they can adapt to the new
> environment quickly enough to turn the business around.
>
Umm not exactly.

Digital leapt into the arms of Compaq at a time when most of
the rest of the computer business was doing rather well and
where Digitals main markets were actually expanding not contracting.

Sun's lack of profitability has coincided with a worldwide
recession and a contraction in the main markets that Sun
operates in.

And Sun's debt rating is interesting but not that relevant,
after all we have 5.2 billion dollars in cash or other
liquid assets rather more than the 1.3 billion we have
in debt. Nor does Sun have a strategy that involves
borrowing money, this debt has remained very static
while our cash reserves have grown.

Ammusingly this thread has been started by Bob's trolling
with a Register article, the same organ that recently wrote
that HP are rethinking their Itanium strategy.

Ammusing because you work for the division that looks
increasingly like a roadkill because of the latest
AMD and Intel developments. You also work for a division
that is entirely dependant on the margins on toner
and to a much lesser extent to a services business.

Over the same 2-3 year period that Sun has lost money
the two hardware businesses in HP have lost rather more than
Sun a fact that has been masked by the change in the way HP
reports BU P&L. Someone has to pay for the ~4 billion a
year HP spends on R&D, it used to be the indevidual BU's
its now the printing division.

> They are moving quickly to try and adopt AMD as a quick fix to the costly
> Sparc strategy. Can they move quickly enough? One thing that helps them is
> that nobody seems to want to try and buy them out for their customer base.
> I'd guess it's a case of perhaps anti-trust, and perhaps the assumption that
> they will impode on their own and the customers will leave anyway, and
> taking over Sun isn't a guarantee of keeping the customers.
>

How ammusing since that would appear to be exactly HP's strategy as
well.

You have after all spent rather more on Itanium and the migration
to it than Sun has on Sparc. And now that Itanium is looking decidly
dodgy you have rolled out a range of AMD based boxes.

Stones glass houses, when will you HP guys learn.

Oh and thanks to Bob for getting you to post that tripe.

Regards
Andrew Harrison