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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: techtonicbull who wrote (50525)	7/21/2002 6:36:33 PM
From: cheryl williamson	Read Replies (1) \| Respond to of 64865

Well let's see here.... Sun has about 38-40,000 employees and they do about $16-20B per year in revenue. IBM has about 300,000 employees and does about $80-90B per year in revenue. HP doesn't count.... Who has the better revenue-per-employee???? This past quarter Sun came in @.01 eps & IBM I've heard came in @.03 eps. The only criticism I have of McNealy & Co. is that they haven't been aggressive enough in buying back the stock with their $6-8B in cash. That money should be used as a dividend. At the current rate $4B would buy back over 800M shares or about 25% of the outstanding shares. Sun will lay off 1,000 by year's end. Not a huge amount, but it is $100M in savings. There's no doubt that Sun could save money and look much better as a company by cutting back. Laying off just 10,000 workers would make the stock go up by a fair amount and the profit picture would look better. BUT, what would that do to the company? Does Steve M. run a computer company??? Has he ever run a computer company??? Does he know what it takes to train new employees?? Does he know anything about engineering projects?? Could he be a successful software project-manager, even of a small project?? Does he know the difference between well-written, well-documented, tightly-drawn code and the other 80-90% of the garbage produced that is shucked off as the equivalent?? Does he even have the vaguest idea of what it took to write an SMP-compliant OS from scratch??? Engineering is a team effort. From the Hoover Dam, through the Manhattan Project, to the Apollo space program, to the invention of the micro-processor. In a "snap back" in demand for computer equipment and services, Sun will hit the ground running. There will be product-continuity along with improvements and cost efficiencies. Those who lay off now will have to ramp up later. Anyone who thinks that is a trivial task, given the nature of the information industry, is still living in the industrial age. If you don't think there will be a "snap back" in demand for computer equipment and computer services, my advice to you would be to sell now. Without a greatly increased demand, all that extra expertise Sun is cultivating will go down the drain. I just don't believe that to be the case. Only 3 years ago Mr. McNealy said that over half the people in this world live their entire lives without access to even a telephone. There are over 6 billion people in the world. That's a LOT of telephones, let alone servers. Our country and the G8 will have to open up and develop those markets. You either believe it will happen or it won't. If the answer is "no, not in my lifetime" don't even bother with tech in your portfolio.