Most businesses are feeling the strain caused by reduced consumer spending and Sun Microsystems is no exception. Technology firms usually are some of the first affected during times of crisis and this is a case in point. Businesses and consumers typically can wait just a little while longer before upgrading to the latest software upgrade.

Windows Vista is a great example of businesses resisting an upgrade. Of course, an unwieldy and expensive operating system generated its own bad press in that case. But whatever the cause, buyers are usually in the driver’s seat when it comes to buying software, it isn’t a necessity for life.

Sun Microsystems is the source of Java, which powers a lot of applications online behind the scenes as well as in client side applets used in various web sites. Its largest loss in sales is from a downturn in high-end servers, according to the Associated Press.

In order to focus exclusively on different initiatives, Sun will be segmenting its business into three different areas. One will focus on continuing to develop Java, another will work on Solaris, and the third will focus on cloud computing applications. The last is a largely untested market, though it has huge potential.

The company is in the midst of focusing more efforts on support of open source software. More businesses are looking to open source because it’s less expensive and still provides most of the functionality they’re looking for.

Essentially by cutting its labor force, Sun is gaining some time to turn its strategy around. Refocusing its efforts on specific key initiatives by breaking the workforce up is an extreme way to create direction, but the company is feeling desperate. At least for now though, Java seems to have a future with a supporting team in place. But if Sun cuts too many jobs, it won’t be able to innovate or further develop at a pace that keeps up with shifting demands. It’s a challenging balancing act.

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Entry was posted on Friday, November 14th, 2008 at 10:25 pm under Internet, Software, Technology.

Read more entries by Matt Jansen.
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