Case Analysis on Sun Microsystems

I. Situation Analysis

Background

MicoSystems Sun Technologies was founded by a group of graduate students from Stanford University. They founded Sun as part of a student project while studying at the University. Andy Bechtoisheim designed a workstation for the University Network building it from spare parts left over from the Department of Computer Science and supply houses in the Silicon Valley area. Andy Bechtoisheim, Vinod Khosla, and Scott McNealy then formed Sun Microsystems in February 1982. The group used the initials of Stanford University's Network to name the corporation Sun. Within the year following, Sun signed a $40 million agreement with Computervision, a company that manufactures computer related products. Sun began expanding globally, opening operations in numerous other countries. They began releasing new products, developing innovative network technology and producing personal and supercomputers.

Sun owned some of the leading products in the network computer industry, specifically the Solaris operating system. Sun controlled all of the elements of production; they designed and manufactured their own software and hardware as opposed to using parts from other companies. Sun was the fastest growing company from 1985 to 1989 according to Forbes Magazine (International Directory of Company Histories, Vol. 30. St. James Press, 2000). Sun acquired IT companies from all over the world, as part of a competitive strategy. Sun felt it would be closer to its customers as it spread out, and be able to provide service to its customers around the clock.

A. Analysis of the Sun Microsystems Strengths and Weaknesses

Sun put a lot of emphasis on global teams. The company frequently picked employees that were best suited to run a project, even if that individual lived in another diverse country than were the project was being implemented. They picked project managers best on credentials and talent regardless of where they lived. The global teams varied in size and configuration, but the general structure was that each manager had eleven direct reports. Sun had a code, called the "Rule of 11", that directed each manager should have immediate supervision over eleven employees. This laid the foundation for employees and managers to have a better repoire and a more intimate relationship at work. Suns workforce teams all varied in terms of culture, language, location and function. This gave the company a leg up against instability in each market around the world.

Working for a company that employs global teams can become extremely difficult to manage for the company; as was the case at Sun. Employees had to work together taking into account the multiple time zones. They also had to try and function in their own workplace locations. Sun employees wanted more flexible schedules that accommodated their needs to work globally and in their own backyard. Employees wanted the company to revamp their work structure and allow them to balance their professional choices with their personal ones. Sun opened a new program to compensate their employee's needs called Open Work. Soon, Open Work became characterized as Suns "way of work" (Tsedal Beyene, October 14, 2008). The Open Work program permitted employees to work from anywhere. Sun was able to reduce its real estate holdings by more than 15% by implementing Open Work. It resulted in a savings of over half a billion dollars in 10 years (Tsedal Beyene, October 14, 2008). More than half of all Sun employees participated in the program and boosted morale and employee satisfaction. The Open Work program allowed Sun to develop an eco-friendly corporation that was environmentally responsible.

The benefits of the Open Work program were significant for the company and the environment. It allowed the enterprise to accomplish massive cuts in operating and capital expenses, increase employee value proposition and provide a greater barrier against business disruptions whether man-made or natural. For managers, it allowed them to have a larger database of talented employees to choose from. Employees can improve their work and private life balance. A major advantage of the program was the social responsibility for the community and the environment. People are spending less time commuting to work and thus in turn producing less carbon dioxide emissions from their vehicle as well as causing less traffic congestion.

One of the biggest problems with Open Work is that it eliminated face-to-face interaction. Many critics believe this is the key to innovation. Managers feared how they would manage employees that they never see. It requires a lot of training and different type of Manager to manage remotely. More importantly was a cultural concern for loss of productivity. How do know if your employees are working? Sun only admitted employees to the program after being thoroughly evaluated. If an employee was not producing while involved in the program he/ she were no longer permitted to participate.

Sun thrived because of the many offerings their company could provide. It included software, systems, storage, services and microelectronics. The company's core brands include the Java technology platform, the Solaris operating system, the MySQL Database management system, StorageTek and the UltraSPARC processor. Sun was able to improve operating efficiency with their products which made them very successful. The launch of the Java technology platform allowed them to corner the market like no other company had previously. It's the most widely used software platform on the World Wide Web. Sun had products, like the disk storage system, that had strong portfolios and were widely recognized.