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Sun downsizing...but upsizing its lead machine?

Sun is losing employees but gaining leads. Is it showing a way for an old dog to learn new open-source tricks?

It's no secret that Sun just laid off 1,000 employees, and may lay off up to 2,500, but what is interesting is how Sun is offsetting the headcount loss with a more efficient way of finding leads.

It's called open source. As TechCrunch reports on Sun CEO Jonathan Schwartz's Supernova talk:

His talk was about how Sun leverages open source by allowing its software (such as MySQL and ZFS) to float out and be downloaded for free, from where a small percentage of those users can be converted to customers. So through open source and free, Sun have the benefit of a free lead generation and marketing machine - especially with MySQL which is currently being downloaded over 70,000 times a day.

At one point, Schwartz had a map of the world with a highlighted dot for each place where a copy of MySQL or ZFS had been downloaded - and it covered almost the whole world (including islands in the Pacific and Indian oceans). Schwartz pointed out that even though there were users of Sun products in those areas, it was accomplished without requiring Sun sales or Sun marketing in those countries or cities.

This is an interesting use of open source: A lead machine to drive proprietary products. This isn't the more traditional "buy a lesser, open-source version of a product and then upgrade to a proprietary, full-featured version" model. Instead, it's using an open-source product to find and penetrate new accounts, and then sell them something completely different.

Sun still has a long way to go, but it's thinking like a disruptor. That's good news for Sun shareholders. The question will be how long it takes to turn a lead into a Sun hardware opportunity, since that's where most of its revenue sits.


Update and Clarification: I just received a helpful clarification from Sun on my comment about Sun making most of its money on hardware:

For the record...saying Sun makes most of its money on hardware is like saying Verizon makes most of its money on phones (they don't, they make it on service contracts initiated by a subscriber buying a phone).

Similarly, most of our revenue comes from systems, not hardware... the delivery of operating platform software (like MySQL, ZFS or Solaris) running on a server, with qualified attached storage, for which a service contract is written.

Not naked hardware - for Sun, naked hardware is a tiny portion of our overall revenue picture (as phones are a tiny portion of Verizon's revenue).

So we distribute software to identify customer opportunities - where the customer wants to buy not a proprietary product, but a commercial support contract and/or datacenter infrastructure for which we're deemed the most innovative supplier.