Daniel Jungwoo Kim

2012196006
Business Negotiations
Professor Park Hun Joon
4/21/2015

Case Study Response: Vinod Khosla and Sun Microsystems

1. Does Vinod Khosla have a real chance at changing Computervisions decision? Does Sun have a better
product? Can Sun be regarded as a reliable longterm vendor?
What Khosla needs to appeal to Computervision is the future of computing. Instead of targeting a narrow
segment, the Sun can appeal to a far wider range of customers. In the way technology makes advances
rapidly, the Apollo will fall behind in pace behind the standardized machines. The processing power and
network accessibility is far superior as well as economic. To compare with the present, smartphone
applications have made their advances through open source packages, making it possible for anyone to
program an application. Correspondingly, the open systems will make it very appealing for software
developers in the case study. The flexibility in usage for customers seems to be a necessity because
different people do different things and if there was an all-rounder machine. To appeal in terms on money,
there is a higher gross margin if making a deal with the Sun instead of Apollo. The lack of staff can be
made up for, with the field of computer science becoming more popular, there will be no shortage of
engineers.
2. How should Vinod Khosla respond to Computervisions president? What should his long-term and
short-term objectives be? Specifically, what should he offer to Computervision?
Khosla and his faculty are well motivated to accommodate the future trend. The only things that the Sun
falls behind Apollo is time and money. The technology is already recognized, but due to the tight
financing and managing of the company revenue, it has been unable to gain market share in the industry.

Seeing in long term perspective, the Sun has captured and is growing market shares in the educational
institutes, such as Stanford who lead in the computer science programs. In a few years, the top graduates
and pre applicants for companies will rely on the Sun due to being more accustomed to it. The future of
the Sun and accelerating growth are the strong points and it is terribly necessary for Computervision to
realize that in order for it to also meet its goals, which is aiming for wide range of domestic and
international customers. Because Computervision does many of the research and development internally,
there could be synergy between the two companies. It is a possibility to form a long term agreement.
Perhaps, due to Computervisions success, they can assist the Sun with marketing and sales force
problems that the company is suffering from as well as financing. With that, the problem of not meeting
the demand for supply would be solved. Cost effectiveness is also a key factor. Apollo workstations are
costly and is partially due to brand identity. None of that exists and pricing for the Sun is much more
affordable. Prices could be further adjusted if the two companies could collaborate to become leaders in
the industry. Apollos strength lies in the experienced senior management who search for methods to be
top in the industry, but they lack the vision. With the right capital, the Sun can easily become the leading
company for workstations, which is why a deal with Computervision is necessary. Furthermore, because
Apollo works with many of Computervisions competitors, the range of possibilities is narrowed down. A
new platform can induce innovation which other companies would be laggard to in following.
3. What are the consequences of not doing this deal?
Apollo and Computervisions deal would mean disaster, especially if it becomes a long term relationship.
The Sun has just begun building a reputation within the market for workstations and if Apollos reputation
grows further as the industry standard, other companies would not be able to compete. They would have
to resort to niche markets that the Apollo devices do not have a solid market share of, but Khosla is intent
on building their organization to become the industry standard, and beyond the industry as well. For that,
they would need to find success in this field first as a stepping stone. Their technology is what fits the
vision of personal computing and industry workstation computing.