Sun Microsystems (Nasdaq: SUNW – News) today announced that it will change its Nasdaq stock ticker symbol from SUNW to JAVA, the ubiquitous technology and brand it created in 1995. The stock ticker change will go into effect for the trading community on Monday, August 27, 2007.
Exactly what shareholder value does this create? Is it going to open the door to new sales opportunities? Are stock analysts going to upgrade Sun on the strength of this change?
And what is the opportunity cost of doing this? Even though it’s managed to squeeze out a series of small profits, Sun’s product revenue numbers are flat. I’m sure that over the last 12 months there have been several unsuccessful bids which Sun could have won by incremental product or support engineering – engineering that would have cost much less than this relabelling exercise.
So how does Jonathan explain it? In three sentences:
“The Java brand and technology have evolved to be among the most pervasive on the internet, yielding extraordinary awareness for Sun and opportunity for the community that leverages it,”
Technology? Absolutely. Java is the standard language for SOA engineering. It’s the Visual Basic of the server side. But brand? I don’t think so. The Internet has moved beyond branding technology; what’s important now is branding services and communities.
And has Java’s success yielded “extraordinary awareness for Sun”? Not obvious. Certainly among those who are aware of technology, Sun’s workstations, servers, and Solaris OS are at least as important as Java. Indeed Sun seems to think so too: recently I’ve see more Sun press releases about Solaris, multithread chips, “eco-computing”, and so forth than I have about Java.
“More than a billion people across the globe, representing nearly every demographic, market and industry, rely upon Java’s security, innovation and value to connect them with opportunity.”
Absolutely true, even if 99.99% of them have no idea whatsoever that they do so. That’s the power of infrastructure engineering.
“That awareness positions Sun, and now our investor base, for the future.”
Bzzzt! First this awareness is probably illusory. Second, how would such “awareness… position [the] investor base for the future”? This is simply silly. Investors care about the business proposition, performance against goals, financial reports, and the rate of return. None of this remotely justifies a rebranding exercise such as Jonathan is proposing.
Look here. I really, really wish Sun well. I’m a shareholder, I’ve got a lot of friends there, and I admire the way in which Sun continues to push the envelope on computing technology. The recent announcement about transactional memory is a great example of this. ZFS is fantastic, and Black Box is a great idea. I want Sun to win. But stunts like changing the stock ticker symbol are not going to persuade skeptical customers to buy. (In fact it’s a distraction: Sun salespeople are probably going to waste 10 minutes on every sales call explaining this nonsense, time that they should be spending on Niagara throughput or ZFS availability.)