Sun Microsystems: Will itContinue to Shine as theInternet Company? An Analysis of the Use of Information Technology to Gain a Competitive Advantagewithin Sun Microsystems 1Table of Contents Paper ObjectiveScopeSection I: The Internet Hardware and Software IndustryA. Industry ProfileB. Competitive Strategies within the IndustryC. Porter Model Evaluation of Industry ForcesD. Globalization of the IndustryE. Importance of Information Technology to the IndustrySection II: Company Perspective: An Analysis of Sun MicrosystemsA. SUN Microsystems company ProfileB. Market and Financial PerformanceC. The Competitive StrategyD. Significance of Information SystemsE. Strengths and Weaknesses of Sun MicrosystemsSection III: Information Systems at Sun Microsystems.A. Structured AnalysisB. Strategic Option GeneratorC. Roles, Roles and RelationshipsD. Redefine/Define2E. Significance of TelecommunicationsF. Success Factor Profile Section IV: A Final Analysis of the Success of Sun MicrosystemsA. The Success of Business Strategy and IT Used to DateB. The Effective Position of the Company for Future Performance3ObjectiveThe objective of this paper is to analyze key business strategies and the use of information technology by Sun Microsystems to gain a competitive advantage in the internet hardware and software industry. Sun Microsystems is one of the major players within this broad and brutally competitive technology related market. This paper will place major emphasize on Sun Microsystems and its position within the Internet Hardware and Software industry. This analysis will be accomplished in four sections. Section I discusses the Internet hardware and software industry by defining the structure, the general strategies and trends, the impact of globalization and the importance of information technology within the industry. Section II focuses on Sun Microsystems, describing the company, its competitive strategy and financial performance and its position within the industry. Section III gives a structured analysis of the role and use of informationsystems within Sun Microsystems, including a narrative of the factors which have contributed to the success of Sun Microsystems. Section IV discusses the success of Sun Microsystems use of information technology in support its business strategies in the past, and whether these factors have effectively positioned the company for the challenges of future.ScopeThe Internet hardware and software industry is one of the most dynamic and challenging industry’s in the world. This industry alone has a major impact on businesses from a wide range of markets and varying size.Companies within this industry compete by fulfilling the demand for increasingly robust, effective and scaleable internet server systems and by providing the server application environment that will be used to propel internet business objectives. To survive in this industry companies need to be able to provide a rangeof quality server hardware products and they need to be able to provide an effective operating system platform that will suit the needs of small, medium and large businesses. This paper will focus on three companies, which are primary contenders within the internet hardware and software industry. These includeSun Microsystems, IBM, and HP/Compaq. These companies tend to compete within three distinct segments, which include, low-end (less expensive), mid-range and high-end internet hardware/software solutions. Historically, high-end products have produced the most revenue, but in a tough, cut-throat economy, competitors within this industry are doing all they can to leverage competitive advantage from allsegments of their market. Although, internet application software within this industry includes both, windows based operating system software, and UNIX based platforms, analysis will focus on UNIX based solutions, which are provided by all three top competitors within this industry. As illustrated in this graph, during the second quarter of 2002, Sun Microsystems held 39% market share asprovider of low, mid, and high-end server hardware/software solutions. Hewlett Packard held second place with 31% market share and IBM finished third at 20% market share. [18].Internet Hardware and Software IndustryCompetitors Server Systems range Operating System Market Share Q2, 02Sun Microsystems Small, mid-range, high-end Solaris-Unix 39%IBM Small, mid-range, high-end OS-2 31%HP/Compaq Small, mid-range, high-end HP-UX-Unix 20% 4SECTION I: THE INTERNET HARDWARE AND SOFTWARE INDUSTRYA. Industry ProfileThe internet hardware and software industry is dominated by companies who continually fight to increase their share of the market. Generally, these companies are characterized by being able to provide internet hardware/software solutions within the low, mid, and high-end server markets, including providing the Operating System application to drive the hardware. For examples, Sun Microsystems is continually trying to attract customers who have historically only implemented IBM or HP server solutions. These companies also fight to become the standard internet application solution. Growth within this industry is due primarily to the number of new products, reliability and scalability. Companies are also increasing alliances as they contend for international leadership and market dominance. Customers are looking for internet hardware and software solutions that will allow for tremendous online, internet, intranet scalability and flexibility, while at the same time providing on-time product delivery and exceptional customer service. The following chart shows the relative size of the dominant players within this industry for the past two years. The change in market share among the three segments shows the dynamic nature of this industry. The Internet server market generated 60 Billion dollars in sales during the year 2000. 5During 2000, Sun Microsystems shipped more UNIX servers than IBM, HP and Compaq combined to lead the market in both shipments and revenue. Sun ended the year with a 44 per cent share in shipments and 35 per cent share in revenue. [19]Entry-level UNIX server category: Sun posted 80 per cent growth year-over-year to take first place in shipments with 315,180 (44 per cent share). In units, Compaq, HP and IBM all suffered share point losses. In revenue, In contrast, IBM fell 28 per cent year-over-year and dropped five share points to end the year with nine per cent market share,
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