Company Overview
A leading maker of computer networking tools, Sun offers a full range of servers, enterprise infrastructure, and system management software. The company also makes computers that use its own chips (SPARC) and operating system (Solaris). But perhaps the most recognizable member of Sun’s repertoire is programming language Java.
Sun was founded in 1982 by four 27-year-olds in graduate school—three at Stanford, one at Berkeley. Made up of two MBAs, one engineer, and one scientist, the team saw great potential for high-speed workstation computers that used the UNIX operating system. They founded a company and named it Sun for “Stanford University Network.”
The company went public in 1986, and forged a deal with AT&T to develop an enhanced UNIX system the following year. It introduced its SPARC processor in 1989, licensing it to stimulate mass production of its systems, reduce costs, and increase the availability of third-party software. Four years later, Sun began to sell its own computer chips.
In 1995, Sun began to intensify its Internet computing operations. The Java programming language let users write software across any operating system, and the company pushed to position Java as the industry standard. In 1996, Sun went on a buying spree, acquiring the business computer unit of Cray Research, fault-tolerant technology specialist Integrated Micro Products, and a handful of other companies.
The company filed a suit against Microsoft in 1997, alleging that the company was distributing incompatible versions of Java. The court ordered a preliminary injunction the following year, and Microsoft agreed to terminate its Java license and pay Sun $20 million three years later. Sun chairman Scott McNealy has been a vocal critic of Microsoft ever since.
The dotcom boom of the late 1990s fueled the company’s expansion, but the subsequent e-recession knocked it off its throne, leveling the playing field for competitors. Sun responded by growing its line of products and services through internal development and acquisitions, which has helped it embrace the open-source movement.
In 2004, Sun acquired Kealia, a server development company developed by one of Sun’s founders. The company also settled a long-running dispute with Microsoft, in which Microsoft agreed to pay $1.6 billion and Sun announced it would incorporate Windows into some of its server lines. Software EVP Jonathan Schwartz was promoted to president in 2004, as well. In the wake of Schwartz’s appointment, the company also announced a cost-cutting plan that included about 5,000 layoffs—almost 9 percent of its total workforce.
In 2005, Sun expanded its managed service offerings by acquiring SevenSpace, an IT services management company, and Storage Technology, a provider of an array of data storage solutions. It also purchased application access software maker Tarantella and application integration specialist SeeBeyond Technology the same year.
To further emphasize its development of Java, Sun changed its ticker symbol to JAVA in 2007. Later that year, it announced the formation of a new microelectronics unit, and launched the UltraSPARC T2, a microprocessor designed for use in third-party servers, storage, and networking devices. The T2 will also be featured in Sun’s own servers.
These days, Sun continues to support its Windows and Linux-based products, though it has remained committed to Solaris. It has also made movement into the high-end data center market. It has also partnered with Microsoft adversary and search giant Google to bundle Google’s browser toolbar with its Java Runtime Environment software—a move that has sparked speculation that the companies may enter into more significant collaborations in the years to come.