The Poster Child for Dead Companies Walking?

At this point, you are probably thinking I'm going to talk about the proposed bail-out of the Big Three U.S. automakers. But I'll leave that to the experts and analysts in that industry. Rather, for my interesting juxtaposition, I want to discuss a troubled company on my own Silicon Valley turf: Sun Microsystems.

I don't write much about Sun because, frankly, I haven't found the company interesting in many years -- especially since the departure of charismatic, always-good-for-a-quote Scott McNealy. In fact, it's been a long time since I even understood why Sun Microsystems existed beyond a certain residual inertia from its younger days, when it dazzled the industry with its workstations and Java software platform.

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But that was a long, long time ago, back when Sun -- even though it had crossed $1 billion in sales -- still had the bloom of dynamic start-up company. Back then, the company had a powerful esprit du corps, was led by a cocky, outspoken McNealy, and seemed to be on a path to overrun a lost Hewlett-Packard and a struggling IBM. I remember when the rest of the industry formed up around a new standard, ACE, designed to stop Sun -- and McNealy came out and said, "ACE? All hat; no cattle." That was the cockiness of Sun as a start-up.

Sun hasn't been that company for years; indeed, it largely missed out on the dot.com boom. Still, the company had enough cachet and market power that, a half-dozen years ago I created something of a scandal by raising the question (in this very column) of why Sun Microsystems still existed.

What I said at the time was that I didn't see the point of Sun anymore: its products were uncompetitive, its revenues, profits and market share -- not to mention its stock price -- were in a freefall, it was shedding thousands of employees in one round of lay-offs after another ... and nothing seemed to suggest any other fate for the company than a long, slow slide to oblivion.

Would it be better, I asked at the time, if obsolete companies like Sun Microsystems simply ceased to exist, liquidated themselves and distributed the proceeds to shareholders and employees -- thereby freeing both to find more productive roles with successful new start-up companies?