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On the Record: Scott McNealy
Sequoia writes "There's a worthwhile interview with Sun CEO Scott McNealy at sfgate. I've always had a hard time seeing how Sun has any long-term staying power. I'm still skeptical, but I was able read why Scott thinks he can be successful, 'execution.' He sounds like a hitman! Like any good hitman, Scott seems uncomfortable with his feelings, or at least he doesn't want to talk about them. 'First of all, I don't get paid to feel.' Sure you do, dude. The best decisions come from the integration of feeling and thought. If feelings don't matter, you can by replaced by a computer. He does a beautiful job putting Dell in his place. 'Michael Dell is the greatest spare parts distributor out there. He'll get you a piston ring or a carburetor or a crank shaft at a really low cost.' But, uhhh, isn't that execution? Scott's international perspective is a breath of fresh air. 'Yes. So global companies grow globally. Shouldn't India be a little upset that we have most of their software programmers here?' Heh."
What's the deal with this article summary? Some random person comments on his comments? Only slightly better than an editor doing it.
do we like or hate sun this week?
What a strange guy... Every time he is interviewed he immediately goes into some super-defensive mode. They weren't attacking him, but he is quick to interrupt and apparently likes the "high school debate team" type situation:
"
A: To what kind?
Q: Industry standards.
A: What does industry standard mean? Define industry standard.
"
No wonder the other three founders are all gone.
'm still skeptical, but I was able read why Scott thinks he can be successful, 'execution.' He sounds like a hitman! Like any good hitman, Scott seems uncomfortable with his feelings,
...
Executing on a business plan is called execution. It's a standard business expression, although a tad dot-commish. No need for retarded hitmen analogies
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
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SVM, ERGO MONSTRO.
Seriously, this is a horrible trainwreck of a "story".
and got done and there were still no +1 comments.
He sounds a little defensive, but that's understandable. He's been beat up over the last couple of years. Everyone's saying no-one needs Sun and it's a dinosaur. "All the talented people are leaving the company".
But they have over $5 billion in the bank and their line-up is really second to none. Dell can't match their highly tailored line-up. They've got a killer community in java and tons of other stuff coming out.
Sun's still useful for some things, and they got cash to burn. They have a marketplace and they have a line-up. What more do you want?
Steve Jobs made a similar crack when someone asked him to compare Apple to other computer makers like Dell and Compaq. He said something to the effect of, "Dell and Compaq are part of the distribution chain for Intel and Microsoft, like CompUSA is. They're not computer manufacturers like Apple or Sun."
What I'm listening to now on Pandora...
The Indian government has been concerned about the "brain drain" since 1990 or so. Atleast that's around the time they started acknowledging the fact that it was a serious problem.
The government puts in a lot of money into the Indian Institutes of Technology and the Regional Engineering Colleges. Tuition fees and on-campus living expenses are greatly subsidized for students who are admitted to these colleges based on national-level exams (like the IIT-JEE believed to be the toughest exam at it's level in the world).
A large percentage of graduates from these colleges look for higher salaries and better jobs outside of India: in the US and Europe or Asia, and given the huge amount of resources that the government (and tax payers) pumped into their education, it naturally gets the jitters when students choose to work abroad.
The Indian government has lately taken to giving pep talks in colleges, in addition to distributing booklets explaning the effect of brain drain on the local economy.
I think brain-drain is essentially an outcome of globalization. Technology, irrespective of where it is developed benefits the world as a whole.
An Indian-American Hindu committed to non-violent thought/speech/action alarmed by the global explosion of radical Islam
I thought it was a great article. You can read inbetween the lines a bit and see the humor in many of his comments.
He's a CEO, not a governor in-the-running. I think his answers were suprisingly candid...and made for a good over read.
Colossians 2:8
I don't believe Sun will die. Claiming they will would be like claiming "IBM is going to die" in 1990. It might have seemed like an intelligent thing to say, but too many background issues ensured it didn't happen.
In fact, Sun and IBM might become a whole lot more similar in the years to come.
Currently they're both companies that have a lot of proprietary mid/high-end server and mainframe equipment out in the field with specialized engineers ready to maintain them. They both have a very large internal focus on research and information management (Sun has its own 'SunLibrary', Google for more information), and both are renowned for developing new technologies which are then "stolen" or "borrowed" by other companies.
Sun and IBM also do a lot of research and provide a lot to disciplines that run alongside their product line. For example, Sun did a lot of work with usability (that's where Jakob Nielsen came from), whereas IBM has done a lot of work on information retrieval and search engines (Google for 'ibm web fountain').
Even if Sun's main market dries up, replaced by Apple XServes and Linux clusters, this will be no more devastating to them as IBM losing out in the x86 market in the late 80's and early 90's.
Sun has a lot of brainpower, a lot of money, and partnerships (Oracle is the latest) to ensure that they'll continue for many years as a research and technology company, if not as a "consumer facing" company.
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Where I work, we just sold several Sun servers at a fraction of what we bought them for, and we used some of that money to buy a dual Xeon box for running Linux. We run Electonic Design Automation (EDA) applications, and we find that they run faster on Linux, and transitioning our design environments to Linux has been fairly painless. The system uptimes are comparable, and the total cost of ownership is lower with Linux. The faster runtime on Linux also lets us get more out of the EDA software licenses that we purchase. About 4 years ago, Microsoft tried to push its way into the EDA market, but that flopped because most of the existing applications ran on UNIX-type OSes, so the transition was too difficult. Now EDA vendors are flocking to Linux at the expense of Sun.
I so needed some 19-year-old, unemployed slashdotter telling me that good business decisions come from the heart.
Oh wait, no, I didn't.
News for Nerds. Stuff that Matters? Like hell.
Executing on a business plan is called execution. It's a standard business expression, although a tad dot-commish.
'Execution' is a word executives use to divert blame from themselves. If a company or team is unsuccessful, "poor execution" is the reason, even though a bad or unrealistic business plan may have been at fault.
When an executive says from the beginning that execution is the key, it means the business plan is shaky. If he actually had a good business plan, he would have said something that sounds like "we can't lose."
I could have done without the editorial.
I'm surprised you didn't mention other thoughts in your head, like whether or not you like twinkies.
>80 column hard wrapped e-mail is not a sign of intelligent
>life
This is an age old marketing issue in the computer industry. Here's my take on it.
A "solution" is, well, something that actually satisifies all the customer's needs. Also known as a "system".
A "product" is something that a customer buys with a defined feature set and just does what the seller says that it does. Also known as a "box".
In McNealy's view of Sun's market, there are two ways to set up a data center or a big web site or whatever he's calling his market these days:
(1) Buy a "solution" from Sun which comes with hardware, software, service agreements, and a damn big price tag. Single-vendor integration all the way.
(2) Buy a bunch of "products" like x86 hardware + a Linux distro + a database and then hire some people to put it all together with in-house support. For example, Google.
What McNealy does not get about open source is that it lets us work on the "products" (kernel, gcc, apache, et cetera) and still let companies sell the integrated "solutions" (like IBM and Red Hat enterprise support). Sun's competition is not Dell; it is other complete "solution providers".
This whole argument is obscured by the fact that most people's experience with computers (including mine) is with personal computers; and for personal computers, Dell, Compaq, et al, do sell complete solutions.
For more on McNealy's anti-privacy advocacy, see http://yro.slashdot.org/article.pl?sid=01/05/29/14 32247&mode=thread&tid=158 and http://slashdot.org/article.pl?sid=01/10/12/003242 &mode=thread&tid=102. I also like the Doctor Fun cartoon.
Cheap labor flows into the US because the rich and powerful want cheap labor. There is little to prevent capital outflows from the United States to address an disequilibrium. Regardless, American companies, since Reagan and Nixon, have subverted the American immigration laws in order to crush unions and discipline labor. Capital is essentially squeezing workers. Real purchasing power for the Average American family is down since 1973, growth rate is down, savings rate is down. The winners are the millionaires. If American companies want to outsource, that's one thing. We should tax that. But to deliberatly target American workers for special competition from guest workers is wrong.
Here's the problem. Programmer makes 80K a year. Boss thinks, "gee, I can hire a guest worker for 50K a year instead". So. Boss gets 30K more a year, guest workter gets $50K a year. And American
looses his job. Yes. World is technicly better off. But American workers are NOT better off. What's worse, the American worker paid for the road that that the foreign worker now drives to work and pays for the school that the foreign workers kids now go to. By the way, we're cutting back on Advanced Placement classes for more spending on English as a second language.
Few would say we need to cut out immigration all together; but the growth of immigration is out of control. Some people should be allowed in. But to massively expand the H1-B program just because the richest people in American want to pay less in wages in crazy. The few who do come in should have full rights as workers, including the right to change jobs easily, be on a citizship track and not be forced to pay lawyers lots of money to fill out complex paperwork.
You mention the Indian government's relationship to it's students. Yup, most are subsidized by the
government. Most Americans have student debt up to their eyeballs. It costs a lot of money to live in Silicon Valley. American workers deserve fair compenstation and not be targeted by special laws like the H1-B program.
We really didn't need Sequoia's "editorial" cluttering up the news here. People should not be able to have their biased opinions posted as part of the story and thus circumvent the whole comment system and get prominent placement of their views without moderation.
The result of this growing disparity between the haves and have nots. I mean everyone acknowledges that brain drain happens because the conditions in some other country are much better than conditions in one's home country, which used to be the case in India up until 90s, but now I think the process has slowed. I know that there are a lot of slashdotters who oppose Indians taking their jobs, but the point is that this is the only area where Indians were able to compete with US, in the face of such a huge disparity. Did you know that US pays a 3 Billion dollars subsidy to its cotton farmers every year. And do you know the number of cotton farmers in US? 25000. Which means a subsidy of 120,000 USD per farmer per year, enough to hire two software engineers. These farmers then compete with farmers of countries like India in the international market whose per capita income is 500 USD per year . That is the irony of the situation that these poaching practices killed almost all the industries of the developing countries, and now the only capital they are left with is their people. (India used to be the biggest producer of cotton once upon a time btw). So now we are seeing them fighting back with the only resource they have. How come slashdotters can make societies to ban H1Bs but can't make societies to ask their sentors to cut down the subsidies being given to already rich farmers and maybe invest this money to make education cheaper or start some other development activity? That is the tragedy of US, that every economist says these policies are bad, every senator knows that as well, but majority of the people are not aware because it doesn't affect them directly. All I am saying is don't fight what you see in front. Spare some thought for the causes behind the problem as well.
What's under yellowstone?
Perhaps, McNealy is referring to #1 in the sense of #1 performance. Again, the #1 in performance is the triad: Power architecture (with implementations being Power4, Power4+, Power5), the Itanium architecture (with implementations being Itanium 2, 3, etc.), and the x86 architecture (with implementations being the Pentium 4, etc.). A quick review of the performance stats at SPEC should clarify any confusion. The SPARC is among the worst processors in terms of performance.
Below is the second key quote.
Compared to IBM, Sun is #1 -- in the sense that Sun has more H-1B employees. IBM, as a matter of corporate policy, refuses to hire any H-1B workers unless they are applying for a job that requires a Ph.D. The Power4, which handily beats the UltraSPARC III in performance, was built almost exclusively by American citizens or permanent residents. No H-1Bs.
Perhaps, McNealy was referring to the number of H-1Bs when he was talking about the SPARC being the supposed #1 computing architecture.
His company's stock is way down in the toilet, his cash reserves are rapidly depleting, PC manufacturers are as close to eating into his 64bit marketshare as they've ever been, IBM is making him its bitch in the high-end market, yet his only concern is the market dominance of Microsoft.
Simply amazing. Get REAL, Scott, come up with a valid VIABLE business plan and execute on it. With cheap mainstream 64 bit computing around the corner you gotta do better than you do these days and sell your crap at competitive prices.
That means, among other things, taking advantage of the SCO situation by telling people to buy Linux or Solaris from Sun so that they can't get sued by SCO.
And you can see his current thinking in this quote: Note the "we have", as in "Sun has". The guy obviously views Sun's ownership of Java as analogous to Microsoft's ownership of
Linux or POSIX don't even enter into his thinking as platforms. He already thinks of the Linux and POSIX APIs as being irrelevant, supplanted by Java APIs, APIs that, by his own statement, Sun effectively owns.
At least with Gates, people know exactly where he stands. McNealy is dangerous because some people actually believe his talk of openness and support of free software. But make no mistake: if it would help his business, the guy would clearly not hesitate a second to kill Linux or grab control of it. And that's just what he is trying to do, both with Java and with his SCO-related efforts.
So which is the #1 64 bit architecture out there? Well, PA-RISC and Alpha are systems which HP is trying to replace with Itaniums. Shame really, they were both very good systems. The Opteron is outselling the Itanium, which is fantastic, except it looks like the Itanium is selling at a rate of about 13000 a year, so neither of the 64-bit ones coming from teh x86 shops are really in the running at the moment. And where's MIPS these days? That leaves SPARC, Power4+ and the PPC970 (too early to tell for that one). Well, the Power4+ seems to perform better than the UltraSPARC, but it only goes up to 32 processors per box, as opposed to 106 for the UltraSPARC III. For quite a lot of applications, large numbers of processors in a box is better than clusters, so these really do offer a lot in terms of performance. I'd expect that those 106 way Sun boxes to have very high scores in the Spec throughput tests.
There's also other measures of quality, such as reliability. IBM has a pretty good reputation for it with the high end products (there was that one story about some ols S/390 which was up for 8 years and only the case was part of the original install), but then again, Sun doesn't have a bad reputation there either. They're both good, and x86 is nowhere near either of them.
So is the SPARC the #1 64 bit architecture out there? Depends on what you mean by #1, but it's certainly a contender for many definitions.
SJW n. One who posts facts.
Interesting. Let's take a side trip to the grocery store.
... okay, so you don't buy off-the-shelf computers from Dell or Compaq. Do you weave your own clothes? Do you generate your own electricity, or does it just come out of the wall? Do you make your own toothpaste? Do you grow your own food? How self-reliant are you about avoiding things that you and your neighbors don't make?
A head of lettuce: definitely a product. Not very useful to the customer until they combine and customize it with other products.
A ready-made salad in a clamshell dish with a plastic fork, plastic knife, napkin, and a pack of dressing: a lunch solution.
Some people go for the solution (especially when it comes from a restaurant rather than a grocery store); some people compose their own solutions from grocery store products.
Flour and yeast: products. Sliced bread: a solution. In this case, most people go for the turnkey "solution" most of the time.
Actually, "product" and "solution" are just crude categories here; there's actually a continuous scale from "grow the grain yourself" to "hot pizza $2 per slice".
But damn
Me, I'm happy to buy turnkey desktop and laptop computers, and then slap a turnkey Linux distro on them and start doing things.
There's nothing inherently good or bad about products versus solutions; it depends on the specifics of the products and the desires of the customers.
In other fields:
CD's and MP3's: very turnkey solution.
Sheet music and guitar tabs: nice raw product.
ftp.gnu.org: many fine products that do fine things
Debian CD: a solution for your personal computing needs
One interesting thing about open source is that there are legions of volunteer programmers working on products, and a complementary spectrum of for-profit companies (plus a few not-for-profit groups like Debian) offering solutions based on those products, and they are working out novel arrangements for mutual co-operation.
I'm surprised by the vehemence of the posts regarding my commentary. I've been reading /. for years. I really did think the first post was supposed to be provocative. It must be my autism. Point taken. In the unlikely event I have something to post in the future, I'll put any commentary where it can be moderated.
Obviously Sun has accomplished a lot. It's an extremely successful business. DEC was another extremely successful business. 'Staying power' may not be important, or even desireable in today's economy.
Still, it's sad to see how people as capable as Scott McNealy can be so preoccupied with hubris. In the interview he says, 'We need to be more aligned in terms of skill sets and we've got that with the new team. We've got exactly who I wanted in there to run the joint.' That's nice, but the shareholders may not want 'yes men' and 'yes women'.
Cheers!
This is a wonderfully naive point of view that seems to be very common on Slashdot. While it might be true in some industries, it makes me think you don't have much experience with H1-B's at the higher levels of the tech industry. So I'm going on a rant....
<rant>
I was a manager at IBM for a couple of years, and in that time I think I hired two or three people on H1-B visas and helped one or two more apply for green cards. (With some overlap between the sets.) This was out of a group of abut a dozen people, so maybe a third of my team was on some sort of visa. The reasons had nothing to do with saving money or time. Instead, the reason was simple: a talent shortage.
My group and the others at our site were feeding off the top of the programmer food chain, to borrow an analogy. We needed engineers who knew the ins and outs of Java and/or C++, had a good grasp of OOD, and were able to figure out the details of standards documents and implement them, or even to help write them in the first place. Just as important, we needed people who were smart and could learn new technologies and languages quickly.
People like this were very hard to find at the height of the tech boom here in the Valley. When I was at IBM I and my group did a lot of interviewing, both on the phone and in person. It took up a lot of time. We got resumes from outside recruiters and we got a lot of transfer requests from other parts of the company. Even with all of those resumes, I still couldn't hire people as fast as I wanted to. Sure, there were lots of engineers available, but most of them just weren't that good. Truly talented "star" engineers are rare.
When I found a star, I did what it took to hire them, even if they weren't a US citizen. H1-B paperwork is a royal PITA, as is getting approval from umpteen levels of management. (If you're a really bad person, you come back in the next life as an immigration lawyer.) It also costs a lot of money to sponsor someone for an H1. I think it was around $5,000 when you added up the application fees, lawyer's fees and so on, but I can't remember. Then you have to do the green card a year or so later, and it costs even more and has more paperwork.
We definitely weren't saving money by hiring people on H1-B's. In addition to the legal fees and management time we spent on the visas, we were paying the H1 folks the same salaries we'd pay anyone else. Every few months we'd informally rank all the employees at the site and make sure the salaries lined up with the rankings, with absolutely no concern over visa status. The better, more productive engineers got paid more, period. There were definitely senior engineers who happened to be on H1's who got paid more than more junior (but still bright) engineers without much experience. I didn't see any correlation with visa status, except maybe that I never made any college hires of people on H1's. (It wouldn't have been worth the expense of flying them over here for an interview; the same thing applies to out-of-town junior-level US people.)
Many people think that market conditions have changed in the last few years and that H1s are now mostly obsolete. I think that may be true at some levels of the industry. But even with all the layoffs in the last couple of years, extremely bright "star" engineers are still hard to find. For an example, look at all the engineering openings at Google. You'd think that in a down economy with lots of engineers out of work, they'd be able to hire people as quickly as they wanted to. If they wanted just anybody, that might be true. But they're also feeding off the top of the food chain; they only want
And this leads to an obvious question. Dell is able to sell products that meet millions of customers needs. They certainly sell more computers than Apple and they certainly beat Sun on desktops. So what is the innovation that Apple and Sun are bringing to the table? After all, with almost no R&D, Dell is able to sell a highly competitive product at a lower cost. I don't think there are too many Dell customers who thought they were settling for less.
They're shifting a commodity product. Classic economics: high-volume, low margin vs. low-volume high-margin, sure Sun don't sell many F15K's but they do sell a significant number of smaller boxes in the 8 to 24 CPU bracket. List price they make over 90% margin on every box they sell - as do HP and IBM. Simple, there's room for both. Dell are piggy-backing off of intel's R&D, Sun invest billions in R&D and recoup the investment over the longer term, on boxes which are as scalable as they are upgradable (with faster CPU's etc.) Sun Enterprise boxes, the 3000-6500 are still holding a amazing amount of their value 6 years after they came out, on a chassis which will accept 167MHz-400MHz CPUs. Just have a look on ebay.
Many problems can be solved by clustering cheap boxes together to achieve parallelism, some problems can't. Some customers need ultra reliable, 64bit big iron boxes with masses of storage. Many don't. Most slashdotters have never experienced high-end enterprise computing, a few have.
I've said it before, I'll say it again - the day Sun stop investing in SPARC/Solaris is the day I sell my stock - I'm not at all happy with the Xeon box precedent, but Sun have had short lived product lines like this before, I wouldn't touch them with a barge pole.
# init 5
Connection closed.
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