High noon

In its first full year, Sun Microsystems achieved an impressive $8.6 million in sales, which soared to $39 million the following year. The company's operating income grew from $588,000 in 1983 to $3.7 million in 1984, reflecting its rapid expansion. This growth led the board, consisting of four investors, to appoint Owen Brown, a seasoned executive from Digital Computer, as president. However, Brown's tenure was brief, and Scott McNealy soon took over, balancing the roles of president and CEO alongside Vinod Khosla.

Sun's business strategy focused on providing engineers with individual workstations, large monitors with graphical user interfaces, and networking capabilities to foster collaboration. The company emphasized industry-standard components and software, optimized for performance, and adopted an aggressive competitive stance. Carl Swirsding, who joined in 1983, and founder Andy Bechtolsheim credited Sun's success to its open systems approach and customer-centric philosophy.

In the mid-1980s, Sun Microsystems embarked on a strategic expansion beyond its initial focus, targeting new markets and fostering software development for its platforms. The company initiated the 'Catalyst' program to encourage software vendors through financial incentives or free hardware, aiming to broaden the applications available on Sun workstations.

This move was part of a broader strategy to make Sun workstations appealing across various industries, including finance and automotive manufacturing. Sun also pioneered the Network File System (NFS), allowing seamless file sharing across different operating systems, and adopted an open system approach by licensing NFS to other vendors for a nominal fee. This strategy aimed to position Sun as a leader in emerging standards, rather than monopolizing them.

Despite encountering challenges with the 386i, Sun Microsystems made significant progress, notably with the Sun-3 workstation's launch, propelling the company to $210 million in sales in 1986. That same year, Sun went public in March, raising $45 million through its IPO and growing its workforce to over 2,000 employees. By 1987, Sun's revenues surged to $538 million, with profits of $36.3 million, as the Sun-3 workstation achieved market success, allowing Sun to surpass its direct competitor, Apollo, for the first time. To maintain its lead, Sun reduced the Sun-3's price from $7,995 to $4,995 and enhanced its performance.

In the late 1980s, Sun Microsystems was undergoing rapid expansion, raising concerns about its management capabilities due to its decentralized approach. Despite this, Sun was working on a groundbreaking project, the development of the SPARC microprocessor, based on the then-novel reduced instruction set computer (RISC) technology.

This move was risky as the technology was unproven, but it marked a strategic shift towards proprietary technology with the potential for higher profit margins. The launch of the SPARCStation 1 in April 1989, featuring the new chip, was a commercial success but coincided with Sun's first quarterly loss of $20.3 million.

Sun Microsystems stands out as a unique entity in the corporate world, characterized by its boisterous, argumentative, and nonconformist culture. Under the leadership of Scott McNealy, the company embraces discord and conflict, encouraging employees to express their perspectives openly.

McNealy's mantra, "Kick butt and have fun," encapsulates the company's ethos. April 1st holds a special place in Sun's culture, marked by memorable April Fool's Day pranks, such as Bill Joy's Ferrari appearing to float on water in 1987, and a one-hole golf course constructed in the offices of McNealy and Bernie Lacroute in 1990.

Java, a high-level, class-based, object-oriented programming language, is known for its principle of "write once, run anywhere," meaning that compiled Java code can run on all platforms that support Java without needing recompilation. Created in 1995 by Sun Microsystems, Java quickly became popular for its portability across different operating systems, unlike its predecessors like Basic, C, and C++, which required specific adaptations for each system.

The inception of Java was part of a covert project named 'Green,' led by Patrick Naughton, James Gosling, Mike Sheridan, and John Gage. Initially called 'Oak,' the language aimed to allow devices to interact seamlessly. Despite its innovative approach, the project, which evolved into FirstPerson Inc., struggled to find a market, exploring but failing to gain traction in interactive television and video game consoles. The turning point for Java came when Gosling proposed its application for internet use, leading to its renaming and public release. Java's breakthrough was further cemented when Netscape's co-founder Marc Andreessen announced the incorporation of Java into the Navigator browser, signaling its potential mainstream adoption on the internet.

In 1996, Sun Microsystems licensed Java to Microsoft, allowing it to run on Windows, which dominated 85% of desktops. This deal made Sun a competitor to Microsoft, despite Sun's coalition with Oracle, Netscape, IBM, and Apple to develop Java. Sun, unique for maintaining its Unix version, Solaris, faced competition from Windows NT.

Sun's refusal to sell Windows NT led to incorporating NT software links due to customer demand. Sun introduced the Darwin workstation for $3,000, challenging the high-end PC market, and bought Cray's e10,000 servers, entering high-end computing. Sun also partnered with Oracle and IBM on a network computer to rival PCs with Microsoft software. By 1998, Sun surpassed Hewlett-Packard in Unix server revenue but struggled with the network computer, leading to a stalemate in its battle with Microsoft.

Sun Microsystems once lost focus on its core principle of changing the game, which had initially driven its success. Instead of directly challenging Microsoft's stronghold on the desktop, Sun needed to shift the playing field to neutralize Microsoft's advantage. As the internet era began, Sun found itself at the cusp of a massive business opportunity. The company's combination of server technology and Java positioned it well for the digital expansion.

In 1998, CEO Scott McNealy restructured Sun into seven operational divisions, each with its own profit and loss responsibility, to capitalize on these strengths. Sun also formed new partnerships, such as with Intel for the Solaris operating system on Intel's Merced chip, and focused on enhancing customer service.