Sun Microsystems, founded in 1982 by Vinod Khosla and Andy Bechtolsheim, proposed a business plan to manufacture affordable computer workstations. The company quickly raised venture capital and expanded its team with Scott McNealy and Bill Joy, who brought technical and manufacturing expertise. Sun's early strategy focused on product development, frugality, and a competitive drive, leading to significant sales including a $40 million deal with Computervision. Despite initial technical issues and intense competition, Sun's innovative approach to standardized components and software, along with a focus on networking, propelled the company's rapid growth. Sun's open systems philosophy and the development of the SPARC processor and Solaris operating system further established its market position. The introduction of Java revolutionized Sun's image, positioning it as an Internet technology leader. Sun's corporate culture emphasized innovation, fun, and a confrontational style, which played a role in its dynamic growth and ability to adapt to industry challenges.
Sun Microsystems was conceived in a six-page business plan in early 1982 by founders Vinod Khosla and Andy Bechtolsheim, both from Stanford University. Khosla, an Indian-born engineer with entrepreneurial aspirations, and Bechtolsheim, a German-born engineer and Ph.D. candidate at Stanford, envisioned a company focused on manufacturing high-end computer workstations for processing-intensive applications such as computer-aided design (CAD) and computer-aided manufacturing (CAM). Their plan aimed to leverage standardized components to offer these machines at a price significantly lower than the competition, ranging from $10,000 to $20,000, compared to the $25,000 to $100,000 charged by others. Within five days of finalizing their business plan, they secured $284,000 in venture capital, setting a goal of $4 million in sales for their first year. To achieve this, they expanded their team to include Scott McNealy, a Harvard and Stanford graduate with manufacturing experience, and Bill Joy, a University of California at Berkeley graduate known for his expertise in UNIX. John Gage also joined as vice-president of marketing and sales, bringing essential marketing skills to the team. Sun Microsystems operated frugally, prioritized product design, and saw McNealy emerge as the de facto leader. The launch of the Sun-2 in late 1982 marked the beginning of sales and technical acclaim, despite a glitch with its 19-inch monitor that took a year to resolve. A pivotal moment for Sun was securing a three-year, $40 million deal with Computervision, a leading CAD systems supplier, after initially losing the contract to Apollo Computers. Khosla and McNealy's persistence in revising their bid, offering to sell the machines at cost for credibility over immediate profit, paid off, establishing Sun as a serious competitor in the industry.
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