Bloomberg News

Ex-Sun CEO Jonathan Schwartz Connects Caregivers With New Site

February 16, 2012

Feb. 15 (Bloomberg) -- Two years after Sun Microsystems Inc.’s sale to Oracle Corp. ended his run as one of Silicon Valley’s most prominent chief executive officers, Jonathan Schwartz is resurfacing on a smaller stage.

Schwartz announced today the debut of CareZone, a startup website that lets family members and health-care workers share information about aging or ill parents, spouses and children. CareZone has seven employees, is funded with less than $2 million of Schwartz’s own money, and came about as a reaction to his need to care for older parents -- and a desire to try a different business than Sun’s, Schwartz said in an interview.

“You find yourself having to care for someone else,” said Schwartz, 46, whose parents are in their 80s and moved to California to be closer to their son. “The amount of time I wanted to spend on golf courses talking about server consolidation -- those days are gone.”

Schwartz took the reins at Sun, once a power in the computer workstation and server market, from co-founder Scott McNealy in 2006. The company was losing money and forfeiting sales of servers that used its expensive Sparc processors to makers of low-cost machines with Intel Corp. chips. The losses deepened, and by January 2010, Sun was sold to Oracle for $7.3 billion -- or an enterprise value of less than half its annual sales, according to data compiled by Bloomberg.

‘Decimated’ Sun

“When the financial crisis hit, we were decimated,” Schwartz said, still sporting his trademark ponytail. After Oracle’s nine-month takeover process ended, he began planning his next venture with CareZone co-founder Walter Smith, a longtime friend and college mate who was a developer of Apple Inc.’s Newton handheld computer in the early 1990s. Schwartz took some lessons from working with the millions of independent software developers who wrote for Sun’s platform.

“In the enterprise space today, switching costs off their existing systems are near-infinite,” Schwartz said. “The innovation has really slowed down.” Consumers, on the other hand, are more open to trying new products, he said.

CareZone is based in San Francisco, with software developers in Seattle. It provides a repository for families’ information on medications, medical documents and care instructions, borrowing elements of social-network websites with strict privacy controls for sensitive data. The site will charge $48 a year, or $5 a month, avoiding the need to show ads or mine users’ data for marketing purposes, which can be intrusive when handling personal information, Schwartz said.

“We’ve been lulled into believing you can trade off privacy for productivity,” he said. “Privacy is toxic to a social-media company. It forces companies that are based on ads to push the limits of privacy.”

Privacy Controls

On CareZone, the account creator is in charge of all information and limits who can see it. There’s also no integration with Facebook Inc. or other social-media sites, and no concept of followers or other ways for outsiders to view what a user is doing on the site.

John D. Halamka, a doctor and chief information officer of Beth Israel Deaconess Medical Center in Boston, said CareZone could address a fast-growing sector of the health-care market because patients want to control their own medical information.

Yet consumers may have little patience for typing information into a website, as evidenced by Google Inc.’s decision to shut down its Google Health site. Microsoft Corp. also offers an online health-information locker called HealthVault at no charge, Halamka said in an e-mail. Support for electronic medical records could save patients from having to type data into CareZone, he said.

Hospitals, Companies

Schwartz said HealthVault primarily targets hospitals and large health-care companies. CareZone’s beta testers preferred leaving management of electronic records to hospitals while using the site for other tasks.

CareZone plans to have 100,000 users signed up within a year, Schwartz said. And he said he’s moved on from the Oracle sale, when CEO Larry Ellison essentially cut him out of public communications during the acquisition process, preferring to use McNealy as a spokesman.

“Unlike selling a Sparc machine, there’s no limit on market size” on the Web, he said. “I don’t spend a lot of time worrying about my reputation.”

--Editors: Stephen West, Nick Turner

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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