A few minutes with Scott McNealy

After Friday's keynote address at JavaOne, former Sun CEO Scott McNealy chatted with a handful of reporters and analysts about his plans for the future and his vision for Sun going forward. This article is a partial transcript of that event, as fast as I could type it.
Written by Ed Burnette, Contributor
After Friday's keynote address at JavaOne, former Sun CEO Scott McNealy chatted with a handful of reporters and analysts about his plans for the future and his vision for Sun going forward. What follows is a partial transcript of that event, as fast as I could type it. Any errors are my own. --Ed

Scott McNealy

Scott McNealy:
Here's an overview of the transition and what I'm going to be focusing on. I'm thrilled not to have to be CEO. It was supposed to be a temporary thing, that lasted 22 years... Jonathan is a perfect match to take Sun forward for the next 22 years. Jonathan and I are highly aligned about what the opportunities are at Sun.

I didn't want to just retire. You saw the cause we're on: to eliminate the digital divide. There are 3 basic categories of initial focus for me. One is the U.S. government, our #1 customer. Whether you like the U.S. or not, it's going to be a major player in eliminating the data divide. I'm chairman of Sun Fed now.

Second is our Japanese partnerships; now I can spend a little more time with them. I'm like an airplane crash dummy for Jonathan.

Third is aiming at our top 20 customers, like Google, AT&T, Comcast, and so on. For instance there was an absolutely requirement that I had to go play the Pro-am golf tournament (laughter).

On top of that I'll be meeting lots of governments around the world, working aggressively on education. These are the markets and areas I want to focus in on. Obviously health care is a big part of eliminating the digital divide. I think I'm uniquely qualified to have the conversations, open these doors, with heads of state, CEOs, etc., and I'll bring the input back to Jonathan.

In many ways I'm busier than I ever thought I could be. For the first time I'm 100's of emails behind. I never worked harder for less pay in my life. There are lots of examples of founders and ex-CEOs remaining on the board, such as Michael Dell, Rollins, Gates, Balmer, Scott Cook, Steve Bennet. I can follow some of those role models. Questions?

Q: What's your take on plans to make Java open source?
A: With all of our technology, our strategy to outfit the data centers is to share. That's what open source is all about. Benefits include: 1. lower barrier to entry, 2. engineering, 3. customers have a lower barrier to exit, they can choose multiple vendors. We're working on unencumbering, creating license models that are acceptable. Ultimately we're preserving the value in the product, allowing the most enormous amount of sharing, with low barriers to entry and exit.

Q: What about the compatibility issue?
A: Check with Jonathan on that. See #8 on my top ten list (laughs).

Q: When you were talking about the top 20 customers you mentioned Google. What are you doing with them?
A: Erich Schmidt is driving a very careful operation, keeping everything confidential. So I'm not going to share; I don't want to tick off anybody with that kind of capital budget (laughs).

Q: How do you foresee the relationship between Java and new trends like RFID, interaction with machines, AI, etc.?
A: We certainly didn't expect all this stuff 10-11 years ago. From the video, remember JavaMan with the ring? A long time ago we figured that Java was going to get very small, wearable, and invisible. All those sensors create events. Every camera, etc., we have to have a place to send it. "The network is the computer". Java web services are the way to manage all those events, alarms, and sensing activities. You saw some interesting IP there around the application server, like the real time video. Some day we'll all want that on our cell.

We're working aggressively on Solaris Enterprise System, creating a scalable gridable environment to capture all that info, to manage and secure it, to analyze, store, and forward in an appropriate manner. The computing problems are getting bigger and more complex, so it takes more R&D than ever before. That's why we share.

Q: If Microsoft is no longer your arch rival, who's your biggest competitor?
A: Customization by IBM Global Services. Fueled by CIOs who want to build their own server Frankenstein... and IBM Global Services helps you. There's nobody else [besides Sun] out there that has all the pieces. IBM wants to build a unique Frankenstein grid so you have to pay Global Services to keep it running, while we want to go to the dollar a minute public utility grid. That's where the battle is.

Regarding Microsoft, do they compete against Google, or Sony Playstation, or Red Hat, or who? There's a lot of places and spaces they're going. We're doing grids. IBM is doing custom grids.

Q: But IBM earns a fortune...
A: We'd rather solve the problem through technology, not head count. It turns out we can share. Storage is storage. You don't need a custom email system in your shop. Go use Comcast mail, or Yahoo, or whatever. In some sense a custom, proprietary, unique, Frankenstein grid is unnecessary. It might be fun, like [the custom built robot car] Tommy. I look at most people's data centers and I see Tommy. I don't see a standard Lexus or Mustang, or whatever. How many of you have your own custom telephone switch?

Scott McNealy

Q: What will it take to get the mobile carriers to open up their platforms?
A: I believe every year JavaOne gets bigger, the community gets bigger, and JCP is driving the APIs. The less any one handset manufacturer or service provider can hijack things the better. And it's going to be good for them too - they can still build services on top of it. Right now, I'd say, when you see the stuff going on with consumer, device, and mobile products, all the vectors that are going on, with compatibility, with common development tools, with billions of devices... at some point people who try to go super proprietary are going to lose out to the people who are doing sharing.

We were the Red Hat of Berkley back in 1982. Ultimately sharing wins. When it's mankind vs. any service provider, mankind is going to win. I'm confident, but I'm not speculating. Long ago people stopped doing 99% compatible PCs. You're not going to do "almost ethernet". "Almost Java" is not going to be a good thing either.

Q: What's your take on Project Semplice? [Visual Basic on the Java VM]
A: There's going to be choice. Microsoft is not going away, and Sun is not going away. Sun and Microsoft are the two development communities left. To assume the other will go away away is not being very customer centric. We put this thing to bed a long time ago, with the patent amnesty agreement with Microsoft. There is no IBM or HP or EU or Asian development community. .NET and Java are the lead dogs. Nothing else is even close.

So it was incumbent upon us... as the market gets bigger, Microsoft and Sun understand that making this stuff work together, and getting the other 3/4 of the world on the network, is what it's all about. At the engineering level, I've been fascinated to see how the Microsoft and Sun technologists have a mutual respect for each other. We can work in a bi-lateral interoperability way.

Q: Why are former Sun employees re-joining?
A: We recently made an explicit decision to be public about the "boomerangs". Actually they've been coming back for 24 years. People leave Sun because it's the best name to have on your resume. It's the hot ticket, so the head hunters love to walk up to their boss and say "I stole somebody from Sun". But they miss Sun, the environment, culture, philosophy, cause, mission, and they come back. And they're always welcome back. I've got boomerangs hitting my email door all the time, saying can we get back in. If they keep knocking we'll eventually find the right spot for them. They tend to be much happier when they get back. Besides, a lot of times when people leave we end up partnering with them at their new position.

Q: There's a certain perception of companies like Google and Ebay; What does a company need to do to achieve celebrity status?
A: It's the difference between an infrastructure and a service provider. Ebay is a huge customer of ours. Google is a huge market opportunity. Yahoo is a new and emerging customer. We look at them as customers. I wouldn't say we do a ton of business for MSN (laughter), although our Opteron boxes would run what they do much better. I don't want to be in the service provider business. We want to be the "arms supplier" to all the service providers in their fork fight, and make sure they're doing it in Java web services.

Q: Recently Dell announced they're going to be using AMD. Will that have any impact on Sun over time?
A: Probably a bigger impact on Intel than anybody. The other big opportunity is that Opteron has a really wonderful operating system called Solaris 10, that is ported, tuned, certified, and runs like the wind. It's just a huge market opportunity. Not that we don't run on Intel, we do, it's just that Opteron really takes advantage of things like fast IP stack containers, dtrace, self healing, etc.. I don't know how many Dell systems are already certified for running Solaris 10 but Solaris is the most scalable operating system. It makes it easier for us to leverage the Dell base than when they were running on the lintel. Plus, we got a head start.

Q: Has anything changed inside Sun that would make the stock go up and people want to return?
A: The brightest folks realize there's no way to justify 10x revenues. We're now faster than Power with UltraSparc plus. Nobody has anything like T1. There have been 10 million downloads of Solaris. They understand the Java momentum.

There's always cycles. We generate cash flow positive from operations. With our war chest and R&D budget we're one of the long term players.

Also being explicit about the cause [is helping our recruitment]. Boomerangs aren't doing it for money. Dave Douglas came back; he's VP of Eco responsibility, and he is so excited about what he's doing. For the really great people, it's not a question of "if" but "when".

BTW, my old email address, ceo at sun.com doesn't work any more (laughter), but scott.mcnealy at sun.com should work.
Take-away quote: "I never worked harder for less pay in my life."
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