Jonathan Schwartz: Last days of Sun; unveils startup

Sun's last CEO blames the financial crisis for the demise of the company and takes the lid off his new healthcare site.
Written by Jim Kerstetter, Contributor

Let's start with this: Jonathan Schwartz knew that the sale of Sun Microsystems was inevitable.

Schwartz, you may recall, was Sun's last chief executive--the guy who, in 2006, inherited control of a trailblazing company that had seen better days. He was full of personality until his departure, which he announced in a haiku tweet, but he acknowledges that there wasn't much he could have done to reverse the slide that eventually led to Oracle's 2009 deal to buy the company for $7.4 billion.

Could Schwartz have slowed Sun's decline? Sure. But stopped it? Not likely.

"The thing we could not have predicted is the rate at which the financial crisis destroyed our business," Schwartz said in a Tuesday interview with CNET. About a third of Sun's customers were major financial institutions, many of them using Sun servers that cost more than $100,000. They were built on the company's own Sparc chips. And once those companies stopped buying, and others left the fold for cheaper Intel- and AMD-based alternatives, Sun went into a downward spiral. "That business," he said, "was irretrievable."

Schwartz obligingly talked about his final, difficult days at Sun because, after more than a year of work, he's finally taking the wraps off his new venture, a health care site called CareZone. (It was previously called Picture of Health.) That's the trade-off a well-known executive is usually happy to make: I'll let you pick at the carcass of my old company, if you're willing to talk about what I'm doing now.
Schwartz's company was originally called Picture of Health. (Credit: Screenshot by Stephen Shankland/CNET)

"You had a one-way transition off Sparc, and that business was irretrievable," Schwartz said. That CareZone is running on Amazon's hosting service is yet more proof that the transition from high-end servers to cheap network equipment and hosting services was inevitable.

After the sale of Sun, after a few months off to get his "head straight," Schwartz started talking about what he wanted to do next with longtime friend Walter Smith, who worked on the Newton OS at Apple and later worked on Windows, Internet Explorer, and MSN at Microsoft.

The answer was quite unlike what Schwartz had done before: a subscription-based health care site that would allow customers to keep track of the medical needs of the people for whom they care. The concept may sound simple, but the need is significant, said Schwartz, who has two kids and two parents in their 80s. How do you keep track of their medications, their medical visits, even their legal documents, beyond a mishmash of Word documents and sticky notes?

The answer, Schwartz believes, is his site, whose simple interface enables easy information tracking and sharing. CareZone is expected to launch today at 9 p.m. PT. Users can choose their level of protection, from a simple password to a more complex challenge-and-response system, and can refine what different people can see. A sibling, for example, could be given the right to see an elderly parent's legal documents. That parent's professional caregivers, on the other hand, may only be able to see their medication and emergency information.

CareZone's business model is entirely subscription-based. There are no ads, and Schwartz promises that it will never grant access to customer data short of getting a court order. It costs $5 per month, or $48 annually per person being monitored, and there's a one-year free trail for anyone who signs up before March 15.

The new company, privately financed and with only seven employees in San Francisco and Seattle, for now, may not get the tech industry chattering like a great new app or a new social-networking tool. But it could have considerable mainstream appeal.

As for Schwartz, he'll always be one of the most iconoclastic executives in the tech industry. In 2004, when Schwartz was named president at Sun, I wrote an article for BusinessWeek that could generously be described as "unkind." Schwartz, I wrote, "has a reputation for combativeness, when many argue that Sun needs a diplomat."

The day the article came out, Schwartz called me while driving home to San Francisco from Sun's Silicon Valley office. In those days (all of eight years ago), executives who had just been raked in a weekly magazine didn't do that sort of thing. I don't have the notes from the conversation, so I'll paraphrase what he said: You may think that now, fine. But give me the chance to prove you wrong.

Schwartz did prove me wrong on one count: He was not the provocateur I thought he'd be. But I'm not sure anyone could have saved that company. As for CareZone? There's certainly a market for what it's doing, and you can bet the bank that Schwartz is glad he's no longer not trying to sell $100,000 servers.

About Jim Kerstetter
Jim Kerstetter has been writing about the high-tech industry since the 1990s. He has been a senior editor at PC Week and a Silicon Valley correspondent at BusinessWeek. He is now senior executive editor at CNET News. He moved back to Boston because he missed the Red Sox. E-mail Jim.

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