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: Have lunch, or be lunch.” The Silicon Valley mantra coined by Scott McNealy, the outspoken former boss of Sun Microsystems, a troubled computer-maker, still rings true as the technology industry heads into recession. At particular risk of being lunch are Sun and another once-mighty technology firm:

Motorola, America’s ailing telecoms-equipment giant. Both posted dismal results on October 30. Sun’s sales to Wall Street firms, which are among its biggest customers, fell by 20% in the most recent quarter compared with a year earlier, and it reported a loss of $1.68 billion. Sales at Motorola, meanwhile, fell by 15%, with unit sales of mobile phones down by a third, and a loss of $397 million. Yet even before the downturn, both firms were in serious trouble.

Sun styled itself ‘the dot in .com’ during the internet boom, selling fancy servers to firms rushing to set up online. Motorola’s most recent claim to fame was its hugely popular RAZR (pronounced ‘razor’) handset, the first version of which appeared in 2004. But both companies focused too much on their clever hardware, and too little on software and services. Today Sun accounts for 11.8% of server sales (by value) worldwide, compared with 18.1% in 2000. Motorola’s share of the handset market has dropped from 22.4% at the height of RAZR mania to 9.5% in the second quarter of this year.

Both firms hope open-source software, developed by volunteers and distributed free online, will help them make a comeback. Sun has released an open-source version of its Solaris operating system and bought several open-source firms, notably MySQL, a database-maker. Motorola is building ‘smart’ phones based on Android, an open-source operating system developed by Google, the internet giant.

Investors seem unconvinced. Both companies’ shares have fallen even further than the rest of the market. Sun’s share price has fallen from nearly $24 in October 2007 to below $5; Motorola’s has fallen from nearly $20 to below $5. Both firms have a stockmarket value of less than one-third of their annual sales, prompting suggestions that they should go private.