Newsmaker: The education of Jonathan Schwartz

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When are you going to do that?
Schwartz: Did I just preannounce that? I hope I didn't. That's not currently in the plan, but it is absolutely where the market is headed.

How do you assess the financial effect of the open-source moves? I know you count downloads and you pay attention to who's blogging about what. I'm trying to tie that to the bottom line and the top line.
Schwartz: Every telco (telecommunications company) I know loses money on their handsets, and yet no one ever says to a telco, "Shut down that business, it's losing money," because every telco knows you subsidize the handset to gain a user.

If we held a JavaOne and no one showed up, I'd probably short the stock.

We have to look at the market in terms of what's it worth to get developers to adopt a platform. If we held a JavaOne and no one showed up, I'd probably short the stock, but when you have a developer event and the world shows up, that must mean we're doing something right. In my view that means we're continuing to enhance the relevance of Sun to the planet.

But again, how do you tie that to the top and bottom line?
Schwartz: Yes, I can tie it together with an economic model, and we have very sophisticated metrics that we track across all this stuff. Can I tell you exactly what an incremental download of Java into Brazil is worth? I guarantee you that whatever it is today, it won't be as great as it will be five years from now, but I can't give you an exact dollar amount.

You've had trouble regaining currency among the start-ups who favored you in the dot-com era. Why?
Schwartz: We lost sight of the developer community toward the latter part of the 1990s, and we made a very bad decision about our commitment to Solaris (running on non-Sun) hardware, which we have now completely recovered. Probably we weren't paying attention to the open-source community with Java as closely as we should have been. We weren't paying attention to the smallest companies in the world; we were paying attention to the largest companies in the world.

Believe me, we had our near-death experience.

When the fish are jumping in the boat and you're focused on building the biggest boat in the world, you don't tend to focus as much as much on navigation as you ought to. Believe me, we had our near-death experience. We're very focused on navigation. We know what customers we care about, we know the trends we care about and we're going to make sure that we don't have that experience again.

How much of Sun's recovery is due to the prior administration under Scott McNealy and how much is your doing?
Schwartz: We were just named to be one of the five most ethical businesses in the world. Is that me or is that the guy that used to have my office? When we get that award 20 years from now, I want to take credit for it. How much of our resurgence is a result of my specific activities in the last four months? Little to none. Most of it is a result of the team that we have, the leaders, the innovation, the pipelines, our commitment to R&D. Frankly, that is mostly a derivative of the guy who was sitting in my chair for 25 years before he passed it on to me.

You're a visionary kind of guy. Is worrying about operational efficiency a tedious slog?
Schwartz: What I communicate and what I do all day long are very, very different things. Bear in mind I share my office with Mike Lehman, our chief financial officer. He has the plush chair with a view, and I have the metal chair with a small table. I write my blog in my spare time, not in work hours--that's why the post always ends up there at 1 a.m. Our customers and our developers remain interested in Sun, and our shareholders need to be interested in Sun, but that's a very different set of priorities.

In Don MacAskill's blog on (photo-sharing site) SmugMug, he complained about how he has to reengage with you guys every time he wants a buy another server.
Schwartz: Do you think I'm focused on fixing that?

I've a suspicion, yes.
Schwartz: It doesn't have to lot to do with vision and it does have a lot to do with frame contracts that allow somebody to buy over a period of time for fixed price. If you're CitiGroup or if you're JPMorgan Chase or Deutsche Bank or Federal Express or NTT DoCoMo or the government of the Philippines, we're actually pretty easy to do business with. The problem is we're miserable at making it easy for small companies to do business with Sun. That's my fault, and I'm going to go fix that.

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