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Q: How would you describe Sun's business and how it fits into the Net world? A: We think everything with a digital or electrical heartbeat should be connected to the Net, from smart cards all the way up to 747s and cars and Cray computers. They all ought to have a Java browser. A car is a Java browser with wheels, an airplane is a Java browser with wings, a copier is a Java browser that reproduces documents. But we don't make any of those things.... Then there's the hubs and routers.... We don't make that stuff either.... What we make is what I call "big frigging Web-tone switches." It's not [like] telephone switches, which support a vast numbers of phone calls with 99.999% reliability and all sorts of services built in, such as call forwarding, call waiting, and voice messaging. Rather, we're doing the IP [Internet Protocol] Web-tone switches, which offer e-mail tone, calendar tone, and news tone, etc. And our job is to sell small, medium, and large big frigging Web-tone switches. Q: So you want to be a one-stop shop for Web tone? A: In the past, the customer has had to buy the chip from Intel, the hardware from Compaq, the OS [operating system] from Microsoft, the middlewear from someone like Tivoli, the applications from an Oracle, the database from Sybase, the unistaller from Norton, the storage from EMC. It just goes on and on and on, and it's been a huge opportunity for IBM global services to make it all work. Well, we've been investing in the integrated stack. We may not have the very last piece of technology you need.... But we have a wonderfully stable, scalable, reliable, serviceable, manageable platform. Q: How does the competition stack up? A: Intel and Microsoft are like General Motors -- or General, and Mo and Tors [assuming the Microsoft breakup occurs]. There's only one other company with the necessary intellectual property to do the job: IBM. But it has all these islands of technology, while we've got a strong vision. We've always been pushing the utility model of computing. Q: Can Sun become as dominant as IBM in the mainframe era of the 1960s and 1970s, or as Microsoft in the 1980s and 1990s? A: No, because we're open. Anyone can compete with us. But [IBM and Microsoft's dominance] were freaks of history. IBM invented the computer business, and then gave away the monopoly in one of the greatest brain cramps of all time -- and happened to give it to a very aggressive monopolist. Q: But does openness pay? Wouldn't you command a higher premium on Wall Street if you could lock customers in to Sun technology, as IBM and Microsoft have been able to do? A: This is an "I told you so," and I hate to do that. But when we founded the company 17 years ago, I told Wall Street analysts that "you're charging us a discount because we're open, and your giving DEC and Microsoft and everyone else a premium because they have a proprietary interface." I said there would come a day -- and everyone said I was wacko -- when open would sell at a premium, and proprietary would sell at a discount. And that's happened. It's because all the customers are just too smart today. Nobody wants to get locked in [to a proprietary technology]. Q: How big can the "big frigging Web-tone switch" business be? A: I think this is one of the biggest, if not the biggest, equipment businesses in the history of anything. Telephone switches only talk to telephones. But we're talking about every device and human having to talk to servers. And there are no physical limitations. You can only fit so many more cars in San Francisco. But you can put a sea of [our servers] in acres of warehouses in the high desert connected by fiber-optic cables, and take the power to all four corners of the world at the speed of light. ...People don't need to carry it, it doesn't need to be near you, it doesn't pollute, and everyone needs access to it. And it can be mission-critical or even life-critical, so these are not low-margin businesses. People care about whether this machine is on or not.... If we just do this well, this is bigger than the automobile business. Q: According to some analysts' projections, Sun is expected to grow faster than any high-tech company there is, possibly with the exception of EMC. A: The only one growing faster than us is Cisco, but they're doing it through acquisition. We're doing it through organic growth. Q: Will you do more acquisitions going forward? A: We're going to fill in some pieces. We've got the basic Web-tone switch. But if we have to add the equivalent of call waiting, we'll go out and get it or develop it ourselves. If we need something down the road -- a search engine or something -- we'll go get one. But I don't know what that might be. Q: What do you think of Microsoft's .Net initiative? A: They're just doing what everyone else has been doing: They're going to the Web. Well, duh! Q: Given the explosion of the Net economy, the success of Java and Sun's remarkable growth in recent quarters, it seems the time has come for Sun to cash in on its server-centric vision. But assuming Sun is able to unseat Microsoft as the definitive, trend-setting computer company, how will you preside over the industry differently than they have? A: Microsoft's only play for the last 20 years has been to take the DOS monopoly, buy up promising new technologies, and fold them in and leverage it for everything it's worth.... You could write Microsoft's strategic operating plan with three words: buy and bundle. Or occasionally steal and bundle -- like they stole Windows from Apple, and only later paid them back after the fact [via a $150 million investment in 1997]. But I don't lose sleep worrying that I'm stifling innovation. Q: Can Sun be as dominant as Microsoft or IBM at their peaks? A: No, we can't. Since we have open interfaces, there will always be open competition. But I do think we can be a very large and important player in the biggest equipment business in the history of anything. And we'll provide an awesome return to our shareholders. But we'll do it without being a monopoly. |
