Newsmaker: Scott McNealy far from retired

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Sun has not had much luck in getting the world to scrap PCs in favor of thin clients. Do you still think the thin client will prevail?
McNealy: Our Sun Ray thin client grew, year over year for the full year ended in June, 98 percent. It came out of the year in the fourth quarter growing at 102 percent. It might just be the fastest-growing product we have inside of Sun.

Earlier this month, Jonathan Schwartz said he plans to reorganize certain business units and combine Sun's storage and server product organizations into a new group called the Sun Systems. Does this mean anything about the health of the storage business unit?
McNealy: CEOs reorganize. It's what they do. It has nothing to do with what the organization is developing, selling, servicing and supporting. Everyone makes a big deal out of that. Sun has been very consistent about outfitting the data center. How we organize ourselves to go outfit the data center is fairly inconsequential. I know it makes for fun reading, but that's reading for people who don't have enough to do.

Jonathan will reorganize again. I guarantee it. I know, because I was in his seat for 22 years. I reorganized a lot, too. Reorganizations, typically for an organization that is not changing its product set, which we are not doing, typically have more to do with the players you have on your team than a shift in strategy. If you have good passers, you throw the ball a lot. If you have good runners and blockers, you run the ball a lot. How you organize and line up at the line of scrimmage, doesn't necessarily mean there is some kind of strategy shift.

The only thing that is hard is wondering why I didn't have a Scott when I was CEO. Jonathan is lucky. I was chairman, president and CEO for 22 years. So I never had an airplane crash dummy to go fly around and do all this stuff.

It's been about 18 months since you left your post as CEO to become chairman. Is it hard for you to adjust to not being involved in the day-to-day running of the company?
McNealy: I am so jet-lagged. I am going to get home about 2 p.m. tomorrow afternoon and if I had to go home and run a staff meeting and do a weekend offsite, I couldn't do it. So it's actually harder for me to be chairman than it is to be CEO, not because of what I don't do, but because of what I am doing. There is no shortage of work and opportunity here to go spread the word and take care of our key customers.

The only thing that is hard is wondering why I didn't have a Scott when I was CEO. Jonathan is lucky. I was chairman, president and CEO for 22 years. So I never had an airplane crash dummy to go fly around and do all this stuff. I never had someone to take care of the speeches and all the rest of it, so he can go and focus on what the company is doing day to day.

But I have to say, he's doing an even better job than I did. Maybe because I was spread pretty thin. Maybe because he is a little more organized or a little tougher than I was.

You helped found Curriki.org an online community that uses wiki technology to help educators develop and distribute for free world-class educational materials to anyone who needs them. Other CEOs and former CEOs from large Silicon Valley companies like Cisco Systems and Intel have also started special programs to address educational concerns. Why all the attention on education now?
McNealy: We're all worried about our workforces. We've been trying to solve the education problem for years. I don't have the specific statistics, but in the U.S. we aren't doing that well globally in terms of education. So for us patriotic Americans, we want to fix that. For us citizens of Earth we want to eliminate the digital divide because that is eliminating the education divide.

Yes, I know, but what is different about today's initiatives for education than ones started in the past? Do you think in the past large companies were simply throwing money at the problem and now you're doing a better job of using technology and other resources to get involved in solving educational issues?
McNealy: I think what we are doing at Curriki.org and what others are doing are good and positive contributions to improving the educational system. I'm not going to throw stones at anyone. I will applaud anyone who has ideas, strategies and perspectives on things that can help solve these problems. So for anybody who wants to help, I say pile on.

Let's shift gears a bit here. Sun seems to have successfully transitioned its leadership over the last year and a half. But this isn't always easy for companies. In fact, it seems like there is a trend for so-called activist investors to step in and try to force changes. For example, Ralph Whitworth helped push out Sprint Nextel's CEO Gary Forsee and Carl Icahn has paved the way for Oracle to make an unsolicited $6.7 billion takeover offer for BEA Systems. What do you think of these so-called activist investors? Are they good for companies?
McNealy: I'm the largest individual shareholder in Sun, and I'm more active than Carl has ever been in his companies. I'm totally into activist shareholders.

Do you think folks like Carl Icahn are looking for more short-term returns instead of looking at what's best for companies in the long run?
McNealy: They are probably looking for a shorter-term return than I am. I am a fairly long-term holder. But we have a fairly significant investment from KKR, and I know George Roberts very well...and all the gang. These guys are very focused on the long-term. They're helping.

Is it more important for investors to be interested in the long term?
McNealy: It depends on what you want to go and do. I have taken a long-term view. Just look at all the other computer companies that started from 1970 to 1982? How many of them are left? I think we have done OK. We haven't done the best, but very few people can pull off a Google.

More Newsmakers

[bobby_brady]

Is Sun still alive?

I remember back in the heydays SUN's motto was "The dot in dot com". My, how that blew up in their face. Well, then Scott went on his suing spree and lost track of everything. Sun pretty much fell off a cliff. Now it seems they are trying to do everything possible to stay afloat.

If they didn't have that big cash cushion, Sun would be toast already.

[Lolo Gecko]

i thought ...

Gore invented Stanford University Network, and McNealy invented the internet :)