S w 906M23 SUN MICROSYSTEMS Sc.docx

S w
906M23
SUN MICROSYSTEMS
Scott Jacobs and Prescott C. Ensign prepared this case solely to
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Copyright © 2006, Ivey Management Services Version: 2009-
01-12

PRESS RELEASE
The fourth quarter ended June 30, 2005. The 2005 fiscal year
was over. On July
26, 2005, Sun Microsystems (Sun) unveiled fiscal year (FY)
2005 results: Q4
revenues were US$2.98 billion (2004 Q4 revenues were
US$3.11 billion, but had
included income of US$1.6 billion from a legal settlement with
Microsoft); for
the full fiscal year 2005, Sun Microsystems reported revenues
of US$11.07
billion (FY2004 revenues were US$11.19 billion).
Sun Microsystems Chief Financial Officer (CFO), Steve
McGowan commented,
“We achieved impressive operational improvements in fiscal
2005 . . . our 16th
consecutive year of generating positive cash flow from
operations.” Sun
Microsystems employees, investors and analysts recognized that
Bill Gates had
helped out last year. But what explained this year? Perhaps
Sun was righting
itself?
“Putting our cash to work, we’ve expanded our product
portfolio and announced
plans to acquire companies that deepen and broaden our systems
strategy. We’ve
maintained our R&D commitment and delivered crown jewels
like Solaris 10 to
the market,” said Scott McNealy, chairman and chief executive

officer (CEO) of
Sun Microsystems. “Big-time progress in FY05. The company
is now in a
position to take advantage of the investments we have made
over the past few
years and we believe there is more to come in FY06.”
For the exclusive use of R. Wang, 2020.
This document is authorized for use only by Rachel Wang in
2020.
Page 2 9B06M023
McNealy continued, “Our demand indicators for Q4 were
positive. We have
great partners, lots of cash, and a strong team across the board.
FY05 was a year
of stabilized revenue and earnings. Our opportunity for FY06 is
sustained growth
and profitability.”
“Profitability?” was the incredulous reaction of many who had
followed Sun’s
struggle.
A STRATEGIC CRISIS
At the beginning of 2004, Sun Microsystems found itself at a
serious inflection
point (see Exhibits 2, 3 and 4). It had lost money in eight of the

last 10 quarters
and allowed its market share to slip again, this time from 12.1
per cent in 2002 to
10.3 per cent in 2003, Sun announced its largest product
offering update in
company history. The products were intended to stop the
bleeding that had
caused the company’s share price to plummet to only one-tenth
of its high value
in 2000, a decline that in 2003 raised speculation of a takeover.
The chief
executive officer and chairman of the board of directors was
Scott McNealy, co-
founder of the company originally named Stanford Unified
Networks when it
began in 1982.
Since developing the vision that had endured throughout the
company’s history,
“The Network is the Computer,” McNealy had come under great
scrutiny as many
industry analysts relentlessly questioned Sun’s business-level
strategy.
Specifically, many doubted the effectiveness and
competitiveness of the products
that the company offered during its recent decline in
profitability.
On December 8, 2004, Scott McNealy delivered a keynote
address at an industry
show in San Francisco, California. He relayed some statistics
about Sun’s Java
platform: 579 million Java-enabled phones by the end of the
year, almost one
billion java smart cards and nearly 900 companies were now
contributing to Java.

He spoke of how the world had envisioned the computer 50
years prior and
remarked, “It’s hard to imagine where we’ll be 50 years from
now.” Some in the
audience were scratching their heads wondering where Sun was
headed in the
very near future.
Fiscal year 2005 had just closed and it was now July. With
catchy newspaper
headlines, The Sun Always Rises; Dawn of a New Era for Sun;
and Will Sun Shine
Again?, it was evident that Sun Microsystems was at a
crossroads, and it was time
for serious reflection on the part of Scott McNealy. The
company, based in Santa
Clara, California, had been through a lot in the last 10 years. It
had learned from
some experiences and was still learning from others.
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BOOM TO BUST
In 1997, Thailand could no longer prop up its currency, the

baht. High levels of
debt and years of trade deficits had resulted in a spectacular
crash in the value of
the baht. The ensuing economic crisis engulfed most of Asia
and spread
throughout the entire world, slowing down economies from east
to west. Most
importantly for Sun, the crisis adversely impacted Japan, its
largest single source
of foreign revenue, at nine per cent.
The global economic collapse continued in January of 1999
when Brazil devalued
its currency, the real. The devaluation dashed any immediate
growth plans and
delayed future growth there indefinitely. Brazil had been one of
the countries on
which Sun had been counting to lead information technology
(IT) spending in
South America.
The Brazilian and Asian financial crises provided compelling
evidence that, while
Sun’s diverse portfolio appeared to protect it from individual
blips in economic
stability, its product sales were highly sensitive to
macroeconomic conditions. In
1998, the company reported that more than 45 per cent of its
revenues was
generated outside of the United States. By 2003, Sun’s reliance
on foreign
revenue had increased to more than 50 per cent, and the
economic crises had
unfolded into a worldwide economic slowdown — with some
analysts using the
label “recession.”

However, economic conditions alone did not lead to Sun’s fall
from profitability.
Rather, the economic macro-environment was a catalyst for
change towards
affordable enterprise computing. In addition, technological
advancements led to
performance improvements in the x86 platform.1 Making use of
these
advancements along with utilizing various sources of leverage
to lower cost
structures, many firms were able to offer products similar to
Sun’s but at a
fraction of the price.
Sun’s expensive high-margin products lagged in demand while
the company
attempted in vain to continue presenting its same value
proposition. To
compound the adverse effect of developments in the x86
hardware space,
competitive pressure was also being applied to Sun by an
inexpensive,
competitive and very contrary x86-based software product,
named Linux. This
singular platform would change Sun’s competitive environment
drastically. Open
source software on inexpensive standard hardware began to
unravel Sun’s
offering: a product where software, hardware and service were
bundled.
1x86 hardware stands for x86 central processing units (CPUs)
developed by Intel. This CPU forms the
base of PCs. History of the chip: 286, 386, 486, 586 (dubbed

“Pentium), Pentium Pro, Pentium II,
Celeron, Pentium III, Pentium IV, etc. Other manufacturers,
such as Advanced Micro Devices (AMD) and
Cyrix, have used the same CPU machine code with their own
architecture to create equivalent chips, but
with a lower price-to-performance ratio.
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BILLION-DOLLAR BETS
In 2000, shares of Sun Microsystems hovered near US$60 per
share. Around that
same time, Scott McNealy, CEO, put Masood Jabbar in charge
of managing Sun’s
worldwide sales. McNealy was counting on Jabbar to formulate
the right plan
and strategy to capitalize on Sun’s momentum and reputation
for innovation.
McNealy needed Jabbar to grow the business and build
shareholder wealth.
In response, Jabbar developed a strategy that focused on five
countries that were
each potential billion-dollar-a-year markets for Sun’s server
business. They were
Brazil, Spain, China, India and Italy. Shareholders were

optimistic about Sun’s
potential for growth.
Although shareholders responded positively to Sun’s future,
managers of the U.S.
business at Sun’s Palo Alto, California headquarters were
getting tense. It seemed
as though a meeting could not take place without attention
being diverted from
the U.S. business toward conversations about foreign interest
rates, political
regimes and foreign legal language. U.S. business managers
simply could not
have discussions on policy and strategy without some “foreign
distractions.”
Many of the U.S. managers involved began to feel that those
managers
representing Mexico, South America and Canada were
muddying the waters with
talk about fluctuating currency exchange rates and political
instability. In fact,
those territories accounted for less than a few per cent of Sun’s
business at the
time. The United States had nearly always accounted for
roughly half of Sun’s
multibillion-dollar annual sales.
However, Jabbar’s “billion-dollar bets” required that these
emerging areas get
attention in order to shift the distribution of sales. And yet,
international
managers felt they were getting little cooperation and support to
expand business
in their emerging markets. Jabbar also knew that under the
current structure, U.S.
managers could not focus on their own strategy and planning,

which meant that a
considerable portion of Sun’s revenue could be threatened. The
current
organizational structure was just not working. Something at Sun
had to change.
Jabbar approached Bob MacRitchie, who at that time was
already managing the
South American, Mexican and Canadian lines of business under
the umbrella of
the U.S. organizational division. The infrastructure was already
in place. What
remained was an official transition that emphasized Sun’s
commitment to
pursuing its billion-dollar bets. “I just got on the phone with
Bob and told him
what we were doing,” Jabbar later said, “It took only a minute.”
However, the transition itself was not so easy. The same U.S.
business managers
that previously decried the waste of precious resources on those
underperforming
emerging markets felt a sense of loss they had not anticipated
— a loss of power.
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“Egos were involved here,” Jabbar explained, “It was hard to
get those guys to
give up the control.”
Apart from being a functional decision, the decision was
symbolic of the attention
and commitment Sun would give to these emerging areas. Sun’s
strategy was to
develop these “billion-dollar bets.” The economy was booming
and the demand
for enterprise computing products was growing quickly. Sun
did not have to
chase customers. The sales, it seemed, were coming to them.
However, neither
Sun nor any other company could contend with the competitive
pressure created
by the volatile nature of the new global economy.
ATTACK OF THE GIANT PENGUIN — LINUX
“We’re saying that Linux will eat Unix,”2 was the prediction
for 2003, issued by
John Gantz, International Data Corporation’s (IDC’s) chief
research officer. The
irony was subtle — the Linux mascot was an innocuous
penguin. Linux, an
operating system named after its creator Linus Torvalds, took
the enterprise
computing industry by storm. Its open source, community
approach to
application creation was not only revolutionary in theory, but in
practice as well.
Linux is open source, inexpensive and scalable. Adoption of
Linux products

spread rapidly, especially internationally. In fact, countries
outside the United
States found Linux to be a viable alternative to Microsoft’s
Windows operating
system, which many critics felt was unsecure and not readily
scalable. In 2003,
Brazil’s government urged its federal agencies to adopt Linux in
an effort to cut
costs. Brazil represented no small piece of the pie; it imported
more than US$1
billion more in software than it exported in 2001. In moving to
Linux, Brazil was
not alone. It joined China, Japan and South Korea in using
Linux to get IT
spending under control.
Sun had resisted Linux for a long time since Sun designed its
own operating
system, Solaris. In addition, Sun’s past success was due in large
part to its
strategy of integrating proprietary software (Solaris), hardware
and its own
‘SPARC’ Unix microprocessor.3 By developing not only its
own
microprocessors, but also its own operating system, the
company could have
complete control of the integration of the system hardware and
software. This
strategy ensured optimization and control over the entire design
process. In
effect, Sun created a lot of value for its customers through this
integration.
2Unix software is an abbreviation for UNiplexed Information
and Computing System, originally spelled
“Unics.” It is an interactive time-sharing operating system

developed at Bell Labs in 1969. In the 1990s,
Unix was the most widely used multi-use general-purpose
operating system in the world. Unix is
presently offered by many manufacturers and is the subject of
international standardization efforts.
3SPARC is an abbreviation for Scalable Processor
ARChitecture, designed by Sun Microsystems in
1985. SPARC is not a chip per se, but a specification. The first
standard product based on SPARC was
produced by Sun and Fujitsu in 1986. In 1989, Sun transferred
ownership of the SPARC specifications
to an independent, non-profit organization, SPARC
International.
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However, Sun’s strategic focus on its operating system, Solaris,
and its SPARC
microprocessors prevented it from seeing the threat that Linux
presented.
Eventually, an x86 or Unix server running Linux offered
customers a close
substitute to Sun’s products.
In February of 2002, after years of denial, Sun Microsystems
could no longer fend
off the waves of criticism — it gave in to Linux. To

demonstrate its commitment
to Linux, Scott McNealy gave his keynote speech (in a penguin
suit) at a Sun
trade show to announce the company’s new Linux products.
Typically, Sun
attacked other platforms by suggesting that they were not as
reliable or did not
offer the features of its own Unix servers. However, with the
advent of Linux,
users found a new, reliable, inexpensive choice to expensive
Sun products.
The problem was serious. If Sun refused to offer Linux
products, it would be
cutting itself out of a considerable portion of the server market.
Linux was
dominating the inexpensive x86 server space. Yet, if Sun were
to produce its own
x86 products, it would have to purchase microprocessors from a
third party for a
new line of x86 hardware. Since there was essentially one
company that was
developing highly respected enterprise-level x86
microprocessors, Sun had few
choices. Entering the x86 market would mean teaming up with
a tried and true
competitor — Intel.
For Sun, doing business with Intel would not only mean
accepting the rise of
Linux, but also the commoditization of enterprise computing, at
least at the low
end. Moreover, Sun’s value proposition became increasingly
diminished as the
company lost control of the integration process. By using Intel
chips, Sun would

no longer offer value to customers through engineering and
innovation as it had
previously, but rather via an assembly of outsourced
components. Although very
similar to some of its competitors, that value proposition was a
substantial
departure from Sun’s original model. To counteract this
change, Sun developed
its own middleware, the Java Enterprise System, that would
operate in Unix or
Linux and offered a unique pricing model that made scalable
enterprise
computing more affordable.
In 2003, the People’s Republic of China and Sun announced a
deal. The
arrangement was for 500,000 to one million copies per year of
Sun’s Java
Enterprise System. Most industry observers believed the
blockbuster result of this
deal would not be the revenue, but rather the market share.
Indeed the revenue
would likely not be significant and would even take quite a
while to capture,
given the extended time frame of the agreement. With Java
Enterprise System,
Sun was trying to inject value into its offerings through
research and
development, one of Sun’s competitive advantages.
Continuing to partner with Intel, however, remained a strategic
disadvantage.
After years of competition, joining forces and integrating
development initiatives

2020.
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with Intel seemed unrealistic. Sun’s future in the x86 space
continued to look
uncertain until November of 2003, when Sun announced a newly
formed strategic
alliance with an emerging x86 microprocessor developer —
AMD.
A NEW ENTRANT, OLD COMPETITORS AND BIG
THREATS
In 2003, Advanced Micro Devices, also known as AMD, agreed
to collaborate
with Sun in a new strategic venture. By providing its x86-based
Opteron chips
for use in Sun’s low-end servers, AMD stood to combat years of
dominance by
rival, Intel. AMD’s new Opteron technology took its x86
technology to 64 bits,4
a feat Intel had yet to master. In doing so, it became an
industry leader. Along
with that status came new friends. Sun was not the only firm to
form an alliance
with AMD — HP and IBM both struck similar deals, although
seemingly less
integrated than Sun’s alliance.

Intel leveraged its technology, manufacturing capabilities and
market share in the
PC space to produce chips able to compete in the enterprise
computing domain, at
least in the low-end segment. And, it certainly did not suffer
from diminishing
relations with Sun. Dell capitalized in the low-end space by
selling a large
volume of servers running Linux on Intel. Finding operating
efficiencies allowed
Dell, the fourth largest server maker behind Sun, to turn the
low-end server
market into a battlefield by steadily dropping prices.5
Sun attempted to compete on the basis of price, but found it
difficult to out-price
companies like Dell and even IBM that reduced costs through
sources of leverage,
such as unit volume and consulting services respectively. As a
result, Sun was
losing the low-end battle against Dell, IBM and HP, and there
continued to be
little demand in the high-end for its expensive Unix servers. As
if this were not
bad enough, another competitor was posing a significant threat
to Sun.
Japan’s Fujitsu, which ranked as the fifth largest server maker,
licensed Sun’s
proprietary UltraSPARC chip designs to power its own
SPARC64 chips found in
its line of Unix servers. Fujitsu had great success in taking
Sun’s SPARC chips
and turning them into more powerful SPARC64 Fujitsu chips —
and winning Sun

customers in the process. Fujitsu was much quicker to market
than Sun, which
was reliant on Texas Instruments to churn out its chips. The
situation presented a
very difficult decision for Sun. Should it discontinue its
relationship with Fujitsu
or get in even tighter with the Japanese giant?
Sun Microsystems desperately needed the revenue from the
licensing agreement,
so it was extremely reluctant to cease the licensing contracts.
To complicate
464 bit is a computer architecture term, which refers to the
bandwidth of the arithmetic logic unit, registers
(high-speed memory locations in the CPU) and data bus
(connections between and within the CPU,
memory and peripherals).
5HP was the server market leader, followed by IBM.
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matters further, Fujitsu was not only licensing Sun’s chipset
designs, it was also a
leading reseller of Sun product. Fujitsu was more than a
manufacturer; it served
also as a reseller or channel partner. In fact, Fujitsu’s role was

significant. Sales
to Fujitsu accounted for a large portion of Sun sales in Japan,
Sun’s leading
foreign market in revenue terms.
Rumors surfaced in 2003 about a possible alliance or even
merger with the
Japanese firm. However, for Sun, forming a tighter alliance
with Fujitsu might
cause more problems than it would address. For instance, if
Sun were to begin
using the SPARC64 chips, it might mean spurning its
longstanding chip-
producing partner, Texas Instruments. Given a very large
installed base, such
bridges were not to be burned hastily. Moreover, despite the
fact that Sun and
Fujitsu used the same instruction set for the microprocessors,
Sun and Fujitsu
products could not be used together without some
reprogramming. Adopting the
SPARC64 chips would mean massive reconstruction of its
current products and
the products it had in the pipeline, which suggested that Fujitsu
would remain a
competitor in the future.
EXECUTIVE EXODUS
A month-long executive exodus culminated with the Chief
Operating Officer
(COO) and President Ed Zander resigning. He and four other
high-level officers
— all with at least 15 years each at Sun — departed effective
July 1, 2002. The

naysayers on Wall Street were having a field day — “the
Captain goes down with
the ship.” McNealy was going to do it alone — he named no
successor for the
president and COO’s position. There were also now vacancies
for the vice-
president, two executive VPs and the CFO. On July 18, 2002, it
was announced
that Masood Jabbar would retire from Sun after 16 years of
service. The stock
was at a 52-week low, hovering around US$7 per share.
And things did get worse — at least according to the stock
market. The share
price slowly but steadily, in the coming years, fell to a mark
below US$3. It
would be almost two years before a president and COO was
named — the 38-
year-old, pony-tailed Jonathan Schwartz received the nod from
McNealy in April
2004. Schwartz had come to Sun in 1996 when it acquired
Lighthouse Design,
Ltd. — the firm Schwartz was then CEO of.
ALL BETS ARE OFF
Growth in the server industry was not flat by any means. IDC
expected tech
spending would increase in 2005 and beyond, regaining some of
its lost
momentum from the bubble burst of 2000.

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Scott McNealy’s vision of everything and everyone connected
to the network was
probably not that far from the eventual truth (see Exhibit 1).
Yet, Sun’s ability to
determine the long-term direction of computing was more
refined than its value-
added strategy.
Most of Sun’s billion-dollar bets that were developed by
Masood Jabbar failed to
materialize. In fact, Sun Microsystems was now desperate,
fighting for revenue
each quarter. In retrospect, Sun might have put the cart before
the horse. Instead
of focusing on the evolution of its competitive environment, it
was distracted by
the economic euphoria that reigned in the late 1990s. McNealy
admitted to as
much, “Looking back, we probably hired too many people and
signed too many
leases, but we had a very natural and understandable desire to
fill all the orders we
could.”
The network was still the computer — even increasingly so —
but recent product
offerings and industry conferences suggested Sun Microsystems

and especially
McNealy had succumbed to some inevitable truths about the
competitive
environment of the industry. One was that the x86 platform was
not going away as
McNealy had once envisioned. It became clear that Sun’s
future strategy would
include x86- and Linux-based products, as well as more
compelling and
competitive high-end Unix servers.
To sell Sun product, McNealy was banking on a healthy return
on research and
development. He asserted, “Sun is doing things that Intel isn’t
doing or AMD isn’t
doing.” Innovation, however, was costly. Sun’s R&D budget
had been around
US$2 billion annually for the last few years, dwarfing its
competitors. Innovation
was a key component of Sun’s current strategy, but the results
were not yet readily
quantifiable. Still, McNealy claimed, “[Over the decade,] we’re
going to spend
$20 billion to $30 billion minimum on R&D.” Clearly, Sun was
intent on
continuing to add value through innovation rather than being
relegated to a game
of economies of scale and efficiencies.
Charles Cooper, editor of CNETNEWS.com, remarked, “[Sun’s]
strategy — if you
can call it that — has been to throw a lot of stuff against the
wall and wait to see
what sticks.” It was still hard to tell what the firm and
specifically Scott McNealy
were learning from the devolution of Sun’s business. The well-

known CEO
admitted to strategic missteps but quipped “I try to make a
mistake only once.” “If
your strategy isn’t controversial, you have zero chance of
making money.” “You
have to have a wildly different strategy and you have to be
right. It’s that second
part that gets tricky.” McNealy recognized, “There’s lots more
to do.” Now was
the time to do it.
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Exhibit 1
SUN MICROSYSTEMS’ STRATEGIC DIRECTION
A singular vision -- “The Network Is The Computer” -- guides
Sun in the development of technologies that
power the world’s most important markets. Sun’s philosophy of
sharing innovation and building
communities is at the forefront of the next wave of computing:
the Participation Age.
VISION: Everyone and everything connected to the network.

Eventually every man, woman, and child on the planet will be
connected to the network. So will virtually
everything with a digital or electrical heartbeat -- from mobile
phones to automobiles, thermostats to razor
blades with RFID tags on them. The resulting network traffic
will require highly scalable, reliable systems,
from Sun.
MISSION: Solve complex network computing problems for
governments, enterprises,
and service providers.
At Sun, we’re tackling complexity through system design.
Through virtualization and automation. Through
open standards and platform-independent Java technologies. In
fact, we’re taking a holistic approach to
network computing in which new systems, software, and
services are all released on a regular, quarterly
basis. All of it integrated and pretested to create what we call
the Network Computer.
Source: http://www.sun.com, accessed February 11, 2006.
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Exhibit 2
INCOME STATEMENT
(US$ millions)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Revenue 7,094.8 8,598.4 9,790.8 11,726.3 15,721.0
18,250.0 12,496.0 11,434.0 11,185.0 11,070.0
COGS 3,972.0 4,320.5 4,693.3 5,648.4 7,549.0
10,041.0 7,580.0 6,492.0 6,669.0 6,481.0
Gross Profit 3,122.7 4,277.9 5,097.5 6,077.9 8,172.0
8,209.0 4,916.0 4,942.0 4,516.0 4,589.0
Operating Expenses
Selling, General and Administrative 1,732.7 2,402.4 2,777.3
3,173.0 4,137.0 4,544.0 3,812.0 3,329.0 3,317.0
2,919.0
Research and Development 657.1 826.0 1,190.2 1,383.2
1,642.0 2,093.0 1,835.0 1,841.0 1,996.0 1,785.0
Other 57.9 23.0 - - - 261.0
517.0 2,496.0 393.0 262.0
Operating Income 675.0 1,026.5 1,130.1 1,521.8
2,393.0 1,311.0 (1,248.0) (2,724.0) (1,190.0) (377.0)
Other Income and Expenses
Net Interest Income and Other 33.9 94.7 46.1 83.9
378.0 273.0 200.0 71.0 1,627.0 193.0
Earnings Before Taxes 708.9 1,121.2 1,176.2 1,605.7
2,771.0 1,584.0 (1,048.0) (2,653.0) 437.0 (184.0)
Income Taxes 232.5 358.8 413.3 574.4 917.0
603.0 (461.0) 776.0 825.0 (77.0)
Earnings After Taxes 476.4 762.4 762.9 1,031.3
1,854.0 981.0 (587.0) (3,429.0) (388.0) (107.0)

Accounting Changes (54.0)
Net Income 476.4 762.4 762.9 1,031.3 1,854.0
927.0 (587.0) (3,429.0) (388.0) (107.0)
Diluted EPS Continuing Ops 0.2 0.3 0.2 0.3
0.6 0.3 (0.2) (1.1) (0.1) (0.0)
Diluted EPS 0.2 0.3 0.2 0.3 0.6
0.3 (0.2) (1.1) (0.1) (0.0)
Shares 3,147.0 3,111.0 3,154.0 3,256.0 3,378.0
3,417.0 3,242.0 3,190.0 3,277.0 3,368.0
Source: company files
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Exhibit 3
CASH FLOWS
(US$ millions)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Cash from Operating Activities
Net Income 476.4 762.4 762.9 1,031.3 1,854.0
927.0 (587.0) (3,429.0) (388.0) (107.0)

Depreciation/Amortization 284.1 341.7 439.9 627.0
776.0 1,229.0 1,092.0 918.0 730.0 671.0
Deferred Taxes - - - - - -
(673.0) 706.0 620.0 (315.0)
Other (72.2) 0.9 323.7 858.6 1,124.0 (67.0)
1,048.0 2,842.0 1,264.0 120.0
Cash from Operations 688.3 1,105.1 1,526.5 2,516.9
3,754.0 2,089.0 880.0 1,037.0 2,226.0 369.0
Cash from Investing Activities
Cap Expenditures (295.6) (554.0) (830.1) (738.7)
(982.0) (1,292.0) (559.0) (373.0) (249.0) (257.0)
Purchase of Business - (23.0) (244.0) (130.3)
(89.0) (18.0) (49.0) (30.0) (201.0) (95.0)
Other 170.9 33.3 (94.8) (1,227.1) (3,154.0)
(244.0) 647.0 (125.0) (1,861.0) (73.0)
Cash from Investing (124.7) (543.7) (1,169.0) (2,096.1)
(4,225.0) (1,554.0) 39.0 (528.0) (2,311.0) (425.0)
Cash from Financing Activities
Net Issuance of Stock (467.5) (374.8) (190.8) (242.7)
(285.0) (899.0) (354.0) (317.0) 239.0 218.0
Net Issuance of Debt - - - - 1,500.0
- (13.0) (201.0) (28.0) (252.0)
Dividends - - - - - -
- - - -
Other 18.9 (55.3) (4.6) 88.7 4.0 (13.0)
- - - -
Cash from Financing (448.6) (430.1) (195.5) (154.0)
1,219.0 (912.0) (367.0) (518.0) 211.0 (34.0)
Currency Adjustments - - - - -
- - - - -
Change in Cash 115.0 131.3 162.1 266.7 748.0
(377.0) 552.0 (9.0) 126.0 (90.0)
Free Cash Flow

Cash from Operations 688.3 1,105.1 1,526.5 2,516.9
3,754.0 2,089.0 880.0 1,037.0 2,226.0 369.0
Capital Expenditures (295.6) (554.0) (830.1) (738.7)
(982.0) (1,292.0) (559.0) (373.0) (249.0) (257.0)
Free Cash Flow 392.7 551.1 696.4 1,778.2 2,772.0
797.0 321.0 664.0 1,977.0 112.0
2020.
Page 13 9B06M023
Exhibit 4
BALANCE SHEET
(US$ millions)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Assets
Cash and Equivalent 528.9 660.2 822.3 1,089.0 1,849.0
1,472.0 2,024.0 2,015.0 2,141.0 2,051.0
Short-term Investments 460.7 452.6 476.2 1,576.1
626.0 387.0 861.0 1,047.0 1,460.0 1,345.0
Account Receivable 1,206.6 1,666.5 1,845.8 2,286.9 2,690.0
2,955.0 2,745.0 2,381.0 2,339.0 2,231.0

Inventory 460.9 438.0 346.5 307.9 557.0 1,049.0
591.0 416.0 464.0 431.0
Other Current Assets 376.6 511.2 656.8 856.5
1,155.0 2,071.0 1,556.0 920.0 899.0 1,133.0
Total Current Assets 3,033.7 3,728.5 4,147.5 6,116.4 6,877.0
7,934.0 7,777.0 6,779.0 7,303.0 7,191.0
Net Property, Plant, and
Equipment 533.9 799.9 1,300.6 1,608.9 2,095.0 2,697.0
2,453.0 2,267.0 1,996.0 1,769.0
Intangibles 2,041.0 2,286.0 417.0 533.0 554.0
Other Long-term Assets 233.3 168.9 262.9 695.1
5,180.0 5,509.0 4,006.0 3,522.0 4,671.0 4,676.0
Total Assets 3,800.9 4,697.3 5,711.1 8,420.4 14,152.0
18,181.0 16,522.0 12,985.0 14,503.0 14,190.0
Liabilities and Stockholders'
Equity
Accounts Payable 325.1 468.9 495.6 753.8 924.0
1,050.0 1,044.0 903.0 1,057.0 1,167.0
Short-term Debt 87.6 100.9 47.2 1.7 7.0
3.0 205.0 - 257.0 -
Taxes Payable 134.9 118.6 188.6 402.8 422.0
90.0
Accrued Liabilities 801.6 963.0 1,126.5 1,646.6 2,117.0
1,862.0 1,739.0 1,506.0 1,930.0 1,727.0
Other Short-term Liabilities 140.2 197.6 265.0 422.1
1,289.0 2,141.0 2,069.0 1,720.0 1,869.0 1,872.0
Total Current Liabilities 1,489.3 1,849.0 2,122.9 3,227.0
4,759.0 5,146.0 5,057.0 4,129.0 5,113.0 4,766.0
Long-term Debt 60.2 106.3 1,720.0 1,705.0 1,449.0
1,531.0 1,175.0 1,123.0
Other Long-term Liabilities 74.6 381.6 364.0 744.0
215.0 834.0 1,777.0 1,627.0

Total Liabilities 1,549.4 1,955.3 2,197.4 3,608.6 6,843.0
7,595.0 6,721.0 6,494.0 8,065.0 7,516.0
Total Equity 2,251.5 2,741.9 3,513.6 4,811.8 7,309.0
10,586.0 9,801.0 6,491.0 6,438.0 6,674.0
Total Liabilities and Equity 3,800.9 4,697.3 5,711.1 8,420.4
14,152.0 18,181.0 16,522.0 12,985.0 14,503.0 14,190.0
2020.
final project instructions and marking rubrics
mk153 – strategic web design
to teach to guide to learn
Date: Name:
WEBSITE DEVELOPMENT PROJECT
Website: / 16
Written Report and Presentation: / 20
PROJECT TOTAL: / 36
INSTRUCTIONS:
Instructor:

· The following rubrics provide criteria for which marks are to
be assigned. As you review each part of the assignment, assign
a value for each criterion.
· Provide anecdotal comments as required.
· Each participant should receive a copy of the marking rubric.
ASSIGNMENT DETAILS:
Website:
· For your business created in MK151, you will create a website
using one of the suggested free website building tools (WIX,
Weebly, or Yola)
· Once created, email the address of your website to your
instructor
· Ensure your website has been published, and is available for
viewing by the instructor
· Your website will need to include the following:
1) A visible tagline and content that reflects overall purpose of
website and your target audience.
2) A home page, an about page, a product/services page, a
contact page, which are ordered/accessible based upon your
design and navigation decisions.
3) A unique domain name (available, you would consider
purchasing), minimum of two (2) images, (2) social media
integrations, unique keywords for SEO, taking into
consideration any legal or copyright restrictions.
4) Clear and easy-to-use navigation.
5) Visual consistency across all pages.
Written Report and Presentation:
· Create a document containing the information below, and
submit this document into the Website Design Project portal in
G2.

· Your report must include:
1) Your overall management of this project outlining – Project
Goal, Resources, Time, and Scope.
2) The reason for the website building tool you chose and a
description of the website’s overall purpose.
3) A brief summary about how you have integrated the
information from this course, including SEO, your creative
effort, your plan regarding security and analytics, a minimum of
two business listings you would use, social media integration,
keywords and Google Analytics considerations, as it relates to
your target audience.
· Design a 5-minute presentation for the class summarizing your
report.
COMMENTS:
WEBSITE RUBRIC
CRITERIA
Website Pages
Additional Elements
Flow and Consistency
Purpose
4 marks
All required pages have been created on the website:
Home page and at least 4 underlying pages.
All additional elements have been completed:
SEO, creative effort, security and analytics, integration and
maintenance elements, content marketing and multimedia.

Website is easy to navigate and demonstrates consistency across
all pages.
Website includes a clear tagline. Both content and tagline align
with overall purpose.
3 marks
Most required pages have been created on the website
(1 page is missing).
Most additional elements have been used in the website.
(1 missing).
Some parts of the website navigation are not clear or not
working correctly.
Website tagline is missing or not clear, but content relates to
overall purpose.
2 marks
Some required pages have been created on the website
(2 pages are missing).
Some additional elements have been used in the website.
(2 missing).
Some of the website pages are not designed consistently.
Website content or design does not relate to overall purpose.
1 mark
Few required pages have been created on the website
(3 or more pages are missing).
Few additional elements have been used in the website.
(3 or more missing).
Both the navigation of the website is not clear and pages are not
consistently designed.
Content and tagline do not reflect overall purpose of website.
WRITTEN REPORT AND PRESENTATION RUBRIC
CRITERIA

Planning and Design
Presentation
Overall Management
Building Tool, Website Purpose and Summary
Responsiveness
4 marks
Document submitted addresses all requirements of the
assignment.
Presentation met all criteria listed below.
Provides thorough description of the overall management:
Project Goal, Resources, Time, Scope.
Explanation of reasons for building tool choice, website
purpose, and summary of integrated information is clear
Responds well to questions. Restates and summarizes where
needed.
3 marks
Document addresses most requirements of the assignment
(1 item is missing or unclear).
Presentation met most criteria
(1 missing or unclear).
Addresses most of the management points
Clearly addresses most of the requirements
Generally responsive to questions.
2 marks
Document addresses some requirements of the assignment
(2 items are missing or unclear).
Presentation met some criteria

Addresses some of the management points
Clearly addresses some of the requirements
Reluctantly interacts with audience. Responds poorly to
questions.
1 mark
Document addresses few requirements of the assignment
(3 or more items are missing or unclear).
No criteria were met by presentation
Few points addressed
(3 or more missing or unclear).
Few requirements addressed or are unclear
(3 or more missing or unclear).
Avoids audience interaction. Not responsive to group.
Presentation Criteria:
1. Presentation is clear and organized in a logical way.
2. Style chosen is professional. Information is easy to hear and
view on the screen.
3. Pace was appropriate for audience and allowed information to
be presented in time allotted.
sprott shaw college Page 4 of 4 1019/g2/mk153

S w 906M23 SUN MICROSYSTEMS Sc.docx

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