Sun Microsystems' Ed Zander Sees Shift Towards Outsourcing and Networking

Strategic Insights -

Sun Microsystems' top executive Ed Zander believes that the power of networking and easier access to the internet will drive a new wave of computer service outsourcing. Zander, who was recently appointed president of Sun, outlined a plan to outsource internal networks and servers to computer service bureaus, stating that it would allow the company to focus on its core business of supplying equipment and software to big companies. This move marks a shift towards a more network-centric approach, where companies prioritize broadband access and interconnectivity over traditional PC-based computing.

Key Takeaways:

  • Ed Zander, Sun Microsystems' COO and president, predicts a new wave of computer service outsourcing driven by the promise of more powerful networks and easier internet access.
  • Sun plans to outsource internal networks and servers to computer service bureaus, allowing the company to focus on its core business of supplying equipment and software to big companies.
  • Zander believes that the PC industry is hollowing out, with only a select group of companies making money, led by dominant software company Microsoft and chipmaker Intel.
  • He warned that the PC industry is experiencing a backlash against Microsoft's dominance, citing a visible shift towards alternative platforms like Linux.
  • Zandler believes that programmers and end-users want control over innovation and technology, driving demand for more open and collaborative computing models.
  • He advocates for corporate buyers to stop investing in Windows upgrades and instead invest in broadband access and digital subscriber line (DSL) backbones to enable faster networked applications.

Statistics:

  • Sun Microsystems has an annual revenue of around $US10.5 billion.
  • The PC industry is experiencing losses, with even IBM losing $US100 million on its PC business in the last quarter.
  • Microsoft and Intel dominate the PC industry, but other growth areas are emerging around alternative platforms like Linux.

Sources:

  • Glenn Mulcaster has attended the Java Enterprise Solutions Symposium as a guest of Sun Microsystems.
  • Eckhard Pfeiffer, chief executive of Compaq, was sacked, and Ed Zander was elevated to president at Sun.
  • The article quotes Ed Zander directly, including his warnings about the PC industry and the need for companies to innovate and compete.