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Tomorrow's Fortune 500
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There's an interesting phenomenon in the computer marketplace, which strikes some as counterintuitive: If you double the performance of a machine, customers don't buy half as many, they tend to double their order. Same goes for utilization: If you can double server utilization via Solaris containers or VMWare, people don't buy fewer computers — they buy more. The value of innovation, at least to our core customers, is growing so fast that if the price declines, the overall return (value/price) goes through the roof — encouraging a feedback loop. Moore's Law and free software drive relative pricing down, and customers accelerate their growth. We can prove it. We've had impressive share gains across our systems business — from our aggressively priced Niagara (sorry, Sun Fire X4500) servers to our multi-billion dollar systems. And although I'm thrilled to see our share gains, I'd like to see more growth among customers that don't buy $250,000 at a time, but more like $2,500 — startups and small companies. Granted, we are making headway with a few very cool startups, but we have work to do in a market that daily redefines the network. So we organized an "unconference" for startups in the Silicon Valley area. We had solid, even overflow attendance at this event. Nearly all of the feedback was positive. But there was a troubling, and consistent message. It usually went like this, "Wow, this is a great idea... thank you, Sun. But hey, why are you guys here? I thought you built big expensive stuff that ran in banks?" Ouch. It was a message delivered with sufficient frequency that we've started to really focus on acquiring new customers in the startup community, a traditional stronghold for Sun. So if you are a startup, or you know someone who is, please send them the following: Sun is committed not only to growing in today's Fortune 500, but tomorrow's, too. And as you know, all our software is free for the asking (you pay only for commercial support, when you want it). And we know that you're price sensitive on hardware — so we're going to drive prices into the ground to lower the cost of using Sun's newest innovations. And that's exactly what we've done. If you're a US business that's been in business less than 4 years, and you employ fewer than 150 people, I know you'll find our pricing very interesting. By our calculations, Thumper costs about half the price versus any of our storage competitors. Why are we doing this, even though we're showing great growth? Because growth in our installed base is nice. Growth in the competition's installed base is better. But growth in tomorrow's installed base is best of all. And by definition, every large customer Sun serves today started as a small customer. Jonathan Schwartz | |||||||||
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