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1/29/2004
03:37 PM
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Skeptical Visionary

Companies should hone their ability to react, not predict, McNealy says

Scott McNealy isn't shy about predicting the hot technologies that businesses and individuals will use in the coming years, but he is hesitant to express how all this will play out in the global economy.

"Anybody who thinks they've got a clue has either partaken of an illegal drug or they just don't know any better," says the CEO of Sun Microsystems. "Nobody knows. I don't make any assumptions about the future."

From a technology vantage, McNealy says network computing is at a tipping point, as the race to connect everything of value drives widespread adoption of innovations such as Java, the widely used object-oriented programming language Sun created. All things with a digital, electrical, or biological heartbeat will be connected, he says. That's not surprising, as the core of McNealy's technological vision is the network; Sun years ago hitched its prospects and products to a networked world.


Scott McNealy

"We only look at the last six hours, then react to that," McNealy says.

Photo by Kim Kulish
McNealy foresees network technologies such as radio-frequency identification having significant impact on the regular routines of individuals. Instead of waiting in line to pay for groceries, he envisions shoppers pushing their carts past scanners and then out the door, having their bills electronically deducted from their bank accounts or charged automatically to their credit cards.

But with advances in network technologies, McNealy cautions, come perils. This year could see a virus that causes network outage on a global scale, inflicting real damage on the economy. Businesses, he says, will move away from general-purpose operating systems that cannot provide security and reliability from viruses and worms. That's a less-than-subtle reference to Sun's chief competitor, Microsoft.

Still, companies will rely more on IT and networks to drive down costs and expand their businesses worldwide. In turn, the way companies and individuals buy and sell goods and services will change. "There's no longer any geographic barriers to entry," McNealy says. "You're seeing competitors coming in over the transom like you've never seen."

In the future of McNealy's networked world, buyers will drive down prices by using technology, including the Web, to comparison shop or employ reverse auctions. It's already happening. "Everybody all of sudden is being very aggressive on pricing, and that's putting a lot of pressure on cost," McNealy says.

Still, McNealy is reluctant to take the business visionary role too seriously. "We only look at the last six hours, and we try to react to that," McNealy says. "Then, six hours later we see what happens. The ability to forecast is a shadow, kind of like a paper lion. You think you can do it, but you can't."

Technology isn't about predicting, says McNealy, it's about reacting. "What we try to build in our own internal systems, and what we try to do for our customers, is allow them to be hair-trigger responsive, not long-term predictive. Those who can, respond quickest to the changes."

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