Sun's Schwartz Spars With Gartner Analysts - InformationWeek
03:30 PM
Ransomware: Latest Developments & How to Defend Against Them
Nov 01, 2017
Ransomware is one of the fastest growing types of malware, and new breeds that escalate quickly ar ...Read More>>

Sun's Schwartz Spars With Gartner Analysts

A key issue for Sun shareholders: Can the company turn its innovation into income?

Despite having taken a beating in the stock market during the past few years, Sun Microsystems actually is in an enviable position. At least, that's what CEO Jonathan Schwartz would have us believe.

On Wednesday, Schwartz took the stage at the Gartner Symposium ITxpo 2006 in San Francisco for a 45-minute Q&A session with Gartner analysts Paul McGuckin and Daryl Plummer. The two interviewers repeatedly returned to the topic of how Sun will translate its innovation successes into actual revenue that might revive the company's fortunes on Wall Street.

Bobbing and weaving around the queries like a middleweight contender, Schwartz rarely gave straight answers, preferring instead to speak in analogies to illuminate his insistence that Sun is doing just fine.

At one point, he compared Sun to Google, saying people use Google's search engine similarly to how they use Java.

"Most people use them, but no one they work for told them to use [the tools]," he said.

That's similar to the way users deploy Java--they aren't paying Sun for each usage, but Sun is bound to reap eventual financial benefits from Java's ubiquity.

"The best leading indicator of the success we have in front of us is that we've seen a rush of developers and new customers back to Sun," Schwartz said. "That's proof to me that there will be ample market opportunity for us."

Of course, differences abound between Sun and Google, namely that Google's stock has benefited from a dot-com-like mania fueled by its explosive user growth and no small amount of uncertainty about how, precisely, the company will cash in on all those eyeballs. In this sense, Sun's 25-year tenure and up-and-down performance probably has hurt it in the eyes of investors and financial analysts; there's less mystery about how the company has executed.

Schwartz also drew a dodgy parallel between the IT and the airline industries, pointing out that airplane engine builders make a lot of money, the airplane builders make less money and the airline industry itself has never made money.

"In IT, the most successful companies are not necessarily the ones who make the gizmo in front of you," Schwartz said.

Where Sun resides in that analogy isn't entirely clear. But what is beyond dispute is that Sun innovates as well as any large vendor in the business. But, as Gartner's McGuckin pointed out, "As focused as Sun is on innovation, it's not so focused on exploiting those innovations for financial gain."

Schwartz, who has been at the company's helm for a mere three weeks, said in the coming months he and his lieutenants will be evaluating Sun's core businesses--software, systems, servers and storage--to see where improvements can be made. He also downplayed the recent shuffling of top-level executives in the company's storage and systems divisions.

"I've had nine jobs in my 10 years at Sun; we believe in cycling jobs so we all have a perspective that reflects across the globe," he said.

One thing that won't change is the company's intense focus on R&D.

"We could cut R&D way back and instantly be the most profitable software company in the world, but we'd be relevant to all of you for about 15 minutes," Schwartz said. "Our innovation has put us in the rare position of being able to do good in the world, but also to make people money."

The question is whether Sun and its shareholders will get to pocket much of it.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll