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Vinod Khosla Paper

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Case Study Report : Vinod Khosla and Sun Microsystems(A)

Business Negotiations GMBA
JUNGMIN LEE
Student # 2015427013

The Computervison President´s call states two major issues that keep Sun away from meeting their requirements. Their order will be overwhelming for Sun and their product is considered incomplete. Computervison claims that there is no solid credibility with Sun and doubt their supply capacity. On the other hand, Apollo, their major competitor, seems to have fulfilled the requirements by being the industry standard. They are also well financed and managed, which are the qualities that Sun seems to be missing.

1. Does Vinod Khosla have a real chance at changing Computervision´s decision? Does Sun have a better product? Can Sun be regarded as a reliable long-term vendor? According to the case study, Sun´s system has ben acclaimed within the academic communities. It´s evident why technicians prefer their system: they are standardized, thus more opened to possibilities of different development. Sun also has superior qualities in their network accessibility in terms of feasibility. What Sun was targeting evidently worked with their target customers. They planned their product to be for general usage, and the flexibility of the system seemed to have appealed to the academic sector. While Sun took rather opened system, Apollo developed their own domain network and own operating system, which could be a big obstacle for general usage. Considering the market trend of nowadays, that a rather open system gains popularity between the developers and technicians, Apollo and its distinctive system might not be a good choice for Computervision to take in. Sun’s questionable supply ability can be answered with their last fiscal year history and their outstanding profitability. Employment can be arranged according to their needs, and we can also take a note on that experienced managers are attracted to Sun, which can affect the future stable growth of the company.

2. How should Vinod Khosla respond to Computervison´s president? What should his long-term and short-term objectives be? Specifically, what should he offer to Computervision?
It is strongly suggested that Sun should emphasize the superiority of their system to Computervision, and assuring them that the orders can be fulfilled without challenging their own capacity at the same time. The major weaknesses of Sun are their supply capacity and financial issues. In short-term, Sun needs to stabilize their weak financing and management, which does not attract Computervision to work with them. It seems to be inevitable that Sun needs Computervision’s supervision and help regarding these areas to overcome such shortcomings. On Computervision’s side this might seem as a sacrifice and loss, but in long-term perspective it is not so pessimistic as they might think.
Sun has already built a keen relationship with universities where they value the open system that Sun provides, and it is important to point out that Sun system has become their standard. The case study also suggests that Sun is attractive especially to software developers. This indicates that Sun pioneering the educational institute market was a great investment, since those students who are accustomed to Sun’s platform will continue to require their workstation in their working environment. Therefore, this can be a significant amount of market share increase – which can compensate the short-term ‘sacrifice’ of Computervision.

3. What are the consequences of not doing this deal?
By losing this deal with Computervision, Sun will be putting them in a serious danger of losing their market share. They will not be able to recover the damage and lose the chance to capture future customers. Computervision, also, will be losing a chance to implement a product with a high potential in their business. Apollo clearly has its limitation because of their own domain network and operating system. Moreover, since future engineers who are in the universities at the moment will still prefer Sun, Apollo will not be attractive to them and cause Computervision to lose its competitively in the market

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