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The Business Internet and
Intranets:
Extract (4): Business Internet Vignettes
(cont'd)
Extract's Table of Contents:
Sun Microsystems, based in Mountain View, California, ranks number 244 on the Fortune 500 list. Its business
strategy has
 always been based on its aphorism "The Network Is the Computer." In the 1980s, Sun was an early Internet
user. Today, as a company with more than $8 billion - this figure from fiscal year 1997 reflects a 21 percent increase
from 1996 - in annual revenues, it continues to expand its Internet applications and to discover new network challenges.
Sun will succeed or fail because of the Internet. Its high-performance workstations use the UNIX operating system, the
core software on which the Internet was built. Before the creation of the Mosaic Web browser, the base for the browsers
at Netscape, America Online, and others, the Internet meant UNIX. Sun's cofounder and chairman, Scott McNealy, has been
a passionate advocate of "network centric" computing; in an earlier era, marked by slow and expensive telecommunications,
the PC as Microsoft's private software preserve, and a pre-Web Internet, McNealy was largely seen as mildly eccentric.
Now he's leading a sustained assault on Fortress Microsoft by enabling an entirely new approach to computing through networking.
Instead of a heavy-duty PC handling and storing all software, a stripped-down network appliance gets software as needed from
the Internet. That software is built in small, self-contained "applets," something like a software Lego block, written using the
Sun-sponsored Java programming language. Java is transforming Web software development by letting users add animation and real-time
video to their Web pages. But Sun built its reputation on hardware - workstations, servers, and microprocessors - and its
UNIX-based servers run about half the networks that make up the Internet, while its microprocessors power its own and others'
workstations and servers. Commercial accounts make up one-third of Sun's revenues.
72
As a leading provider of innovations for the Web, Sun is also an innovator in using it. The Web is becoming, in effect, its
organizational structure in action, and it permeates all of Sun's operations and customer relationships. The cost of the Web
per U.S. branch is in the $50,000 to $60,000 range. Jerry Neece, enterprise training program manager at Sun University, comments
on the meaning of this figure to Sun:
To put that into perspective . . . this is the justification we used to fund it. If for example there are three thousand sales people
in the field and the average cost of a trip for a week to take training from Europe is about $2,200 and from Asia about $3,000 and the
number of trips those three thousand people take is reduced by one each year, take the three thousand and multiply it by $2,500, and
that's how much Sun saves. Just in reducing the air travel cost and hotel expenses, it more than pays for the network. In terms of
intranet applications, the one that will pay for itself fastest is probably training, simply because it has such a large cost elimination
associated with it, that is, travel. 73
Sun's extensive use of the Internet and the World Wide Web allows it to address many issues simultaneously, while at the same time lowering
the costs of distributing information, facilitating collaboration, and keeping international customers in close communication. Global reach
is an essential component of its overall Internet strategy.
One seemingly trivial Internet application that saves Sun a lot of time, money, and frustration, for example, is Sun's system for filing online expense reports. Before implementation of the system, forms were filled out and sent to an approval desk, after which employees would wonder what happened to them. Reports often got lost, leaving employees to scurry around, wasting time and getting irritated trying to find or recreate them. Just as often, the reports would be returned to the employee for more information. Now, when filling out online reports, employees find that the system won't forward reports with incorrectly filled or empty fields. The report, once accepted, is e-mailed to all approvers, and the employee knows exactly who has and has not approved it. The entire process happens online, with a savings to Sun of at least 50 percent over the cost of doing it the old way, before the Internet.
74
The following are some of the benefits Sun has gained from its strong presence on the Internet.
75
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Staff at the university where Sun housed its first Web site projected, by the end of the server's first year, ten thousand hits per
day as an optimistic goal. After several months, the volume of traffic was so great that Sun upgraded the hardware at the Chapel Hill,
North Carolina, Sun SITE. By 1993, the server was getting one hundred thousand requests for information daily, and traffic was so heavy
that Sun provided the Sun SITE with a separate high-speed T1 (leased line) connection to improve access and response time. Daily hits at
the Chapel Hill Web server quickly reached three hundred thousand.
-
By June 1995, Sun had fifteen Sun SITE servers in place, handling well over one million hits per day, bringing Sun's brand name and
corporate presence to desktops everywhere. Visitors associate Sun SITE with current, accurate, useful, and interesting information that
is well organized and easy to access.
-
The Imperial College, London, server is the second-busiest Sun SITE, with more than two hundred thousand hits per day, and its collection
of public domain software makes it the most heavily used ftp (file transfer protocol) site in Europe.
-
Katherine Webster, manager of Sun's Internet marketing program, estimates that in 1994 SunService saved more than$4 million in traditional
customer support costs because so many of its customers went directly to a Sun SITE to obtain software upgrades and patches or to find
product solutions.
-
Sun's corporate home page receives one hundred seventy-five thousand plus hits every day.
Innovators in the computer industry don't necessarily benefit from their leadership. Wang, the pioneer in easy-to-use word processing, and Digital Equipment, the inventor of minicomputers and for twenty years IBM's only successful competitor, are now examples of technology leaders and business losers. That could happen to Sun. It's vulnerable on many fronts, and its invention of Java may well create a vast software industry from which Sun, primarily a hardware firm, will not make money. That said, Sun remains a very well run company with superb products, imaginative leadership, and shrewd market sense. Perhaps the main message managers can glean from Sun's use of the Internet is this: Well-run companies use every edge they can get, and the Net adds an edge, even if only for expense reporting and training; by compounding small savings and streamlining processes, only a few years yields a leaner, faster machine.
72. Hoover Company Profiles (Austin, Texas: Hoover Inc., 1997).
73. Marlow, Web Visions, 193.
74. Ibid., 189.
75. Mary J. Cronin, Global Advantage on the Internet: From Corporate Connectivity to International Competitiveness (New York: Van Nostrand Reinhold, 1996), 39.
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