I must add that I was not a customer of Sun Microsystems, nor had I really ever made any serious attempts to get to understand their product range (both Hardware and Software). But it was an opportunity to get to see what they were doing and what their strengths and weaknesses were. This at the end of the Internet Bubble era where they had been riding an exuberant wave.
What this all has to do with "Ultimate Predictions" is that whilst I was fascinated and impressed with almost every aspect of their business.... it was immediately clear to me that there was not a single product or solution that I would be able to really seriously consider buying.
They had an advanced Thin Client Solution (Sun Ray), the SPARC range of Computer Workstations and Servers, and of course, the popular Solaris (Unix Operating System). BUT each and every one of their products were overpriced and in my opinion, going to be cumbersome to deploy. This in an era when standard Intel based server hardware was reliable, cheap, powerful and easy to deploy. I should have seen the writing on the wall..... it really was a great company with great products but totally unfit for the era were hardware had simply become a commodity item. The rest as they say is history, and Sun Microsystems is no more. What little is left today sits within Oracle Corporation who bought the company back in 2010. I should have predicted the demise of this once great company!
So what should one be able to predict about the period ahead - Lets say 5 years from now?
1. IBM
"Big Blue" as it is known, has already dumped its PC and Intel Server hardware business (sold off to Lenovo), let alone its exit from the Chip, Printer, Hard Drive business etc. As for software, it still owns the fading Lotus Notes/Domino software unit, though none of its development is done in-house anymore. Besides, software is fast becoming a commodity business too, so ultimately IBM is really a consulting / services firm with still some Big Iron hardware on offer. But here again, services have become a dog-eat-dog business with margins cut to the bone.
Will IBM survive? Yes.... it still has life left in it...but will it still be "Big Blue"? I certainly doubt it.....more likely it will become "Little Blue", a company a fraction of the size and depth as we know it today and one more focused on consulting, and far less dependent on hardware and services where is has been unable to maintain market share in recent years.
One of the largest investors in IBM stock, Warren Buffett (from Berkshire Hathaway) recently dumped his entire IBM holding (of over 10 Billion US$) having given up on any hope of seeing a light at the end of the tunnel. Its a disturbing vote of no confidence in the company and its management!
2. HPE (Hewlett Packard Enterprise)
Now completely divorced from HP's PC and Printer company, HPE is a smaller entity focused on Servers, Storage, Networking, Consulting and Services. It also has exited its Enterprise Services division, selling it to CSS (Computer Sciences Corporation).
HPE has some fatal shortcomings in my opinion. Firstly, it does not really have a Cloud Network of its own. This in an era when the bulk of its customers are migrating to the Cloud, no longer wanting to invest in their own servers and networking infrastructure.
Problem is that the real money now is in the Cloud, and HPE are simply not there. Second, with the removal of the PC and Printer business into HP Inc, HPE is unable to compete on the client side and has no presence in the consumer space . Thirdly, unlike IBM, is not at all a player in the integrated software space....and in reality, never has been.
So with limited potential for any serious growth going forward, its doubtful that HPE can be anything other than a "Mini IBM" with current revenues and profits only a third of that of IBM.
The problem they face is not an immediate one, but rather a medium to long term one.... can they survive?
Probably only as a small Niche player.... if at all!
3. DELL
In many ways, Dell has taken a very different path to that of HP. HP had scaled down by removing itself from the PC and printer part of the business. Dell did the opposite and scaled up by making the massive acquisition of storage giant, EMC. Also, Dell is a privately held company, so very much free to take the long term view and do as they wish. It allows them to execute without bothering about quarterly deadlines.
But due to the acquisitions, the company now faces a mountain of debt considered to be in the region of about $50 Billion....and interest rates are now no longer low! They may well find itself having to go public again! The merger and product integration with EMC has not really gone that smoothly, and confusion still reigns, but Dell also has ownership of VMWare.... its the secret sauce, along with a its successful founding CEO, that should keep Dell going for a long time.
4. Lenovo
Lenovo is the only Chinese Headquartered giant in the PC world (and also very active in the Server/Datacenter & Smartphone market). Its profits have in recent times declined resulting in the company being dropped from Hong Kong's benchmark index. Much of their misfortune appears to be due to the poor performance of their mobile products division.
Having bought the PC and later, the xSeries Server business from IBM, it still maintains a secondary HQ in the USA and has a true global footprint, operating directly in some 60 countries. This is a difficult company to read..... and with good reason. The truth is that with the Chinese Academy of Sciences as its largest shareholder, it is in reality a "State Assisted" enterprise, though Lenovo always denies this. The reality is that it will never be allowed to fail nor to lack the resources or funding to make future strategic acquisitions should the opportunities arise!
Edit: On 1 November 2021, Dell spun off VMware into a separate independent business. The VMware business no longer seen as strategic asset to Dell in an era of outsourcing servers to the cloud. They intend using the funds to draw down on their large debt burden instead. If this is a strategic blunder... it will soon reveal itself!
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