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Redshifting: Sun's fancy name for growth market
Sun is shifting focus from the war on market share to the war on market growth.
They have a fancier name for it. During a meeting with reporters last Friday, Sun CEO Jonathan Schwartz refered to the phenomenon as "redshifting", named after a phenomenon in physics where light increases its wavelength while its frequency decreases. The opposite is known as blueshift.
The essence is that companies like Google, Ebay and mobile operators have an insatiable appetite for the latest computer technology, while the average ERP shop is doing just fine with its 2-year-old Dell servers or mainframe.
Growth in the second market is achieved by stealing business from your competitors. In the first you only have to keep up with your customer's new business ideas.
The casual observer can't help but notice that Redshifting looks a lot like an attempt to return to the internet hype days, when dotcoms were scrambling to put in their orders for new Sun servers (and you know what happened when the dotcoms disappeared). By focusing on Web2.0 firms today, Sun is positioning itself to deliver the infrastructure of the internet of tomorrow.
The danger in this strategy lays in the fact that Sun has to balance cutting edge internet servers with revenue generating x86 systems. The company's chief executive Jonathan Schwartz is the first to admit that its "blue" business doesn't just make up the bulk of its revenues, it also subsidizes fancy new products such as Sun's "project black box" and its forthcoming Niagara 2 and Rock processors.
But at some point in the future, Schwartz predicted, sales in the "red market" will overtake those of the blue ones.
While the red areas are driven by increased computing demands, the blue ones just hope to do more with less.
March 27, 2007 at 12:19 AM | Permalink
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