Sun and Cobalt left me with a dinky toy

A $2 billion flirtation gone wrong

Letters re: Sun drives the final nail in Cobalt's coffin

A company's decision to kill a product line is never easy for those employees who tried to make the gear thrive or those users who loved and adored the kit. The axing of the Cobalt product line by Sun Microsystems holds true to this maxim with a flurry of former Cobalt devotees rushing to express their sadness at the server appliance loss.

<Reg> readers have helped give a sense as to why Cobalt met its maker and where the server appliance is heading. We'll also be checking in with former Cobalt CEO Steve DeWitt later this week for his take on Cobalt's end and what he is working on now.

Being an ex-Cobalt and Sun employee, I would love to tell you a little more. First off, even though I was fairly early into Cobalt, not all of us made lots of money, in fact I made what I can only say was peanuts. It is fair to say the only Porsche I could have afforded would have been a dinky toy. Sun treated us like second class citizens, and the Sun reps were negative about Linux, and did not want to sell the products.

I had just been transferred to Australia from the UK when Sun took us over, I was the only Cobalt employee here. I am more than happy to let you know that the marketing budget set aside for Cobalt in Australia was $0 for the 10 months I was with them. Sun did not understand Cobalt, and tried to mould it into their way of thinking, however we were selling to a different space, and they could never quite fathom that.

The Sales reps never sold anything, so as Product Manager I went and tried to sell the product myself, only to be told that I was not allowed to, only sales people were, talk about chicken and egg.

I wrote an email to Scott Mcnealy before I left stating where there were some serious problems, yep, it certainly stirred things up, but really only for me. When I was made redundant in the first round of redundancies, (and believe me, that is a whole other story) I sent another email to Scott, regarding the whole lack of effort and on the product within Sun but was assured he was dealing with it. Within 1 week of leaving I was getting phone calls from Sun people as nobody knew anything about Cobalt, I ended up becoming a reseller, but got out of that last year as I knew the Cobalt Business unit was going to be closed down.

Cobalt was the best product on the market, there is still really nothing like it out there. Interesting point to make is that have a look at the latest IDC figures, appliance servers are well up in figures, well above the estimates, with none of the bigboys their, oh and Sun, oh thats right, they have killed their only appliance off.


(Name supplied)

With the possible exception of the executives no one got their options vested or additional cash when the merger happened. In fact, any employee with options that were issued after 2nd quarter of 1999 (but still pre-IPO as the IPO happened in November of that year probably never made a penny on their options.

For instance, I joined Cobalt in the 3rd quarter of 1999 but my stock options were priced over $10. If I had joined in June my options would have been at $2 and still worth something today. As such, If I were still with the company I would have 4,000 options, almost all of which were still immature at the Sun merger (and after the tech crash a few months later) that cost more than twice what they are worth. From the way the tech crash happened there are former Cobalt employees still at Sun who have some options with a strike price over $30, and only one or two allotments that are worth anything and those won't have vested yet. Needless to say, my point is that with rare exceptions there aren't many ex-Cobalt employees who are sitting any better than anyone else who suffered from the crash.

I'm guessing here but am pretty confident given what my employee hire date and number at Cobalt was ... there are maybe 25-50 people who made more than $100,000 from their Cobalt options. Probably only only 5-10 who made over $1,000,000 from theirs. The top three guys certainly made more, but out of an organization that was hired by Sun with 250 employees, that's a small ratio.

Additionally, the $2bn that Cobalt got were due in large part to the negotiating skills of our former CEO (DeWitt). He was a quite impressive salesman and Sun and Cobalt had been courting for quite some time. The employees knew about it but thought that Sun had given up months earlier. With few exceptions it was a BIG surprise to use that we were getting bought.

In an orientation training directly after the "merger" (as they called it at the time, partially to keep Cobalt folks happy and partially to justify the $2bn cost), Sun's HR folks swore that one of the reasons that Sun bought Cobalt was to teach Sun how to move like a small company again. Trying to get 250 so people to infect a culture of nearly 40,000 (at the time) was ridiculous. It has taken -years- for Sun to see the big picture on Linux and it still doesn't seem to get the real picture. Everytime Sun gets close to another breakthrough in attitude the top management layers maim it with some form of Spin.

(Name supplied)

You obviously have read a bunch of propaganda.

Those of us that use server appliances are scrambling to create a replacement for the Cobalt line. There are a few GUIs available, but the cost in some cases is prohibitive.

There are a couple of replacements being developed and hopefully will be released in the near future. Sun has released some of the code for the Qube line to open source and has been rumored to be willing to do the same with the Raq GUI once they offically stop shipping them in the next couple of months.

There is a project to continue development of the Qube interface ongoing, and I am sure the same will happen with the GUI from the Raq as soon as it is released. (And here it is - Ed.)

David Lucas

I just read your article and I'm dusting off the black armband. Qube server appliances were great for small firms.

I am one of two directors of a £2.5m turnover construction firm. No-one else knows IT at all. I got a Qube3 last year and five new WinXP PCs without floppy drives.

From opening the boxes to fully a functioning network with internet access took me 5 hours including loading all the software, and I'd never seen a Qube before.

I could never have done that with Small Business Server 2000 for one thing there is no floppy disk for the antiquated set up procedure. Who now makes something suitable for a 5 or 10 user network who finds that peer to peer is not adequate?

Steve King

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