I love sunsets, most of us do.  My front deck in Belmont, CA looks due west and every night if we aren’t fogged in or it isn’t cloudy, and here in the hills of Belmont that is about 2/3rds of the days, we are blessed to witness the sun dipping over the low but lovely Santa Cruz Mountain peaks that separate Half Moon Bay from Silicon Valley – plenty of Creamsicle skies.   Since I haven’t purchased a Cisco Flip yet and so haven’t recorded a sunset from my deck yet (note to wife – pick your holiday preference, Xmas or Hanukkah gift idea), I am sharing a short sunset I found on YouTube of one of the loveliest spots on earth, Gay Head on Martha’s Vineyard.

But I do not at all enjoy all Sun Microsystems dipping over the the horizon of the IT landscape.  When the Web exploded during the mid-to-late 1990s Sun was a darling of the new echelon.  Their commitment to R&D resulted in a best-of-breed trifecta that included their own chips (Sparc), operating system (Solaris) and programming environment (Java).  Add the fact that they “got” the Web in terms of vision evident by the prescient “the network is the computer” tagline, and Sun basked in several years of notable success.

But Sun missed or was late covering the Omega of several tech vectors:

1. Proprietary UNIX shifting to Linux
2. Proprietary boxes shifting to x86 servers
3. The monetization of Java – imagine if Sun had spun-out JavaSoft around 1999, talk about a cash war chest that could have been used in the bursting of the bubble, hindsight is 20-20.
4. The growing importance of middleware platform; Sun invested but didn’t execute well (remember iPlanet?).  Imagine if Sun had acquired BEA and let them be.  Oracle came out of nowhere, under the prod of Thomas Kurian, and became IBM’s alternative in a linchpin market.

Now Oracle awaits the verdict of the EU regarding Sun because of mySQL primarily, and poor Sun sits twisting in the wind whilst the likes of IBM and Dell play hyena.

So be it, the big fish little fish phenomena is nothing new to the IT industry.  What bothers me though will be the loss of R&D.  Sun’s contributions of ideas and innovations had to be among the top in the industry on a per/revenue$ basis.  Oracle, despite a legacy of organic R&D, has morphed more into a portfolio company than an R&D company, and will likely not maintain the level of R&D investment that Sun maintained in Sun’s product areas.

The golden era of Sun creativity centered around the likes of Bill Joy, John Gage, James Gosling and Eric Schmidt – and their many innovative compatriots inside and outside of Sun – may never be seen again in a commercial IT vendor.   Heck, in terms of marketing innovation the Java then JavaSoft team, with the likes of George Paolini, Jonathan Schwartz and Kim Polese, made things happen that had not happened before in the IT marketing space.   Microsoft, not too shabby at marketing (yes, that is an understatement) had all they could handle with the JavaSoft team.

But now we wait for the final setting of Sun Microsystems, and this is one sunset I wish would hide behind a cloud.  What are the lessons to be learned from Sun?  Two perhaps:

1. The balance between R&D and the realities of the marketplace must constantly be maintained and reviewed.  Creativity cannot be buried under market tactics, but unbridled creativity can cause missed market opportunities, and eventually lead to a hubris and arrogance that can knock the pins out from under an IT supplier.
2. Sun was often faulted, often by IBM, for somewhat hiding their light under a bushel (is that an Eclipse of sorts?).  Make the R&D lines of demarcation extremely clear to your co-creators and partners:  Project A will be utterly off base for anyone external (and most people internal).  Project B will be an open book of participation and learning, even in a coopetitive environment.  Trying to share your R&D but eat it too leaves one exposed to counter-movements, and you spend unnecessary cycles covering your tracks.

What is the deal falls through or Oracle walks?  Will Sun be left to become a white dwarf on its own?  I don’t think so.  Dell has cash and reason.  So perhaps does Cisco.  The difficult part for all interested has been and remains Sun’s diverse mix of assets.  Selling Sun room by room may make the most sense if the current deal falls apart.

The driving force for this ebb and flow is disruption, is one-upmanship.  But, given my developer roots, I know there is no magic there.  It takes serious creative thinking to not only figure out something that potentially trumps the status quo, but also then the discipline to build it solid enough that the market can consume it.  In short, it takes great R&D, and a successful connection to the go-to-market departments.  Where does this R&D take place?

Typically when we think of the hatching ground for ideas for the IT industry, we think of Silicon Valley.  I live in Belmont, CA on the northern edge of Silicon Valley, a few miles up the hill from Oracle.  When I first moved to CA I lived in Menlo Park, just off of Sand Hill Road, the Mecca of tech VCs.  Before moving to California I spent over 30 years in IT in various capacities in the Boston area, and just as Stanford, UC-Berkeley and other universities spawn innovation in the Bay area, MIT and other universities spark tech creativity in the greater Boston area.  Of course tech innovation has become a global phenomena, it no longer is dominated by the historical hotbeds, but I would argue that Stanford, MIT, Carnegie-Mellon, the IITs and the like remain the locus for IT innovation.  But one major class of innovation provider is almost entirely ignored – read on…

The now more globally distributed university and VC-sourced idea mills don’t  interest me that much.  Why?  The number of VCs and analysts and forums and clubs covering the start-up and VC-backed space is like so many ants pushing each other over on a single sugar cube.   They don’t need somebody else, like me, to pour over them, they are covered.

However, I feel that the R&D taking place in established IT vendors receives short shrift.  Though one might immediately think of Apple and Google as IT suppliers who invest seriously in R&D, major vendors like IBM, SAP, Microsoft and Cisco all spend in excess of $1b.  IBM alone spends $6b and claims about $1b in IP licensing revenue.  Of course that doesn’t begin to measure the pass through to their own product and service lines, and the benefit to customers.

I feel and have felt for years that this remains the untold story in the IT industry.  Ironically the little guys, or the cool people creating consumer-oriented innovations, receive the credit.  I’ve decided to start to tell these stories, that is what this blog is about.

Yes, yes, the big vendors are often more well known for being M&A experts than performing organic R&D.  However, there are a fair number of studies showing that the perception of a vendor’s level of innovation directly correlates to P/E ratio.  And some acquisitions by the big vendors are more R&D oriented (didn’t want to build it themselves, somebody had already done a good job) than market share oriented.  This is seldom explored.

Ironically, for IT departments it is THESE ideas and innovation, coming from established vendors, that will likely change the direction of how you do IT in the coming 3 years, not from the VC community.

This change of direction for IT is exactly what I call the blog “tech vectors” – this is about how established vendor R&D creates the new vectors in the tech industry.  I can’t cover everything, so if you know of something please share it.  Agree, disagree, but let’s expose all the great work being done inside of larger commercial IT vendors that has the greatest probability of impacting our IT lives.