Re: SUNW is at best a "king."
Kings are by definition "execution" plays. Good king examples are DELL and EXDS. Gorillas, like CSCO, MSFT, ORCL, INTC, SUNW, QCOM, etc. own proprietary standards with significant barriers to entry and high switching costs once a customer has signed on to the cruise. Although its roots are in UNIX, Solaris has evolved into a proprietary standard, and Java and Jini as well. Quite a number of value chains have evolved around these software standards, which creates a vested interest in their perpetuation.
This is not to say that SUNW doesn't execute well, as befits a king, nor does SUNW have gorilla status in all the markets it inhabits. Example: SUNW is trying to become a prince or king in storage as sort of a systems integrator; however, I suspect that if they are successful in establishing a large customer base here, taking a page from the Cisco (or Lucent) playbook, SUNW will acquire proprietary technology. SUNW has already made a bunch of minority investments in a number of the players.
And just as AMD is mounting a strong challenge to INTC in microprocessors (and has nipped at its heels for years), there is no GG dicta that says SUNW must rule the roost forever in its core server markets. IBM and the Wintel gang are making a good run (from different directions) at the current gorilla, which certainly bears watching.
But no, Lynn, in SUNW's major markets, the landscape is definitely a gorilla game, not a royalty game. The margins SUNW has historically enjoyed are those of a gorilla, not a king.
You may disagree as to SUNW's degree of gorilla-dom, but the nature of the battles being waged seems pretty clear.
Ask yourself, do you think IBM and MSFT are attempting to become merely kings in the server space, or aren't they both really attempting to achieve gorilla status by knocking off the incumbent with their own proprietary technology and establishing their own value chains?
Difference of opinion makes a market (and a good night's sleep)! |
