Newsmaker: The education of Jonathan Schwartz

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You have this very publicly stated goal of 4 percent operating margin in the final quarter of your fiscal year, which is right now...What are the consequences--and likewise with the 10 percent goal for fiscal 2009--if you don't meet that?
Schwartz: We don't set guidelines unless we plan on meeting (them). We're setting guidelines to give people a sense of how we're prioritizing activities. I'm setting compensation schemes internally around those guidelines, so that shareholders know that we're holding ourselves accountable. More realistically we're not focused on figuring out ways to punish people for not hitting their objectives, but we're figuring ways to get them the tools and the resources they need to go to meet those objectives.

As you try to go from your $14 billion annual revenue toward the $2 trillion in annual information technology spending, do you have too many irons in the fire?
Schwartz: If you look at what we've been doing to get more efficient on the R&D side, we are moving everything to a common license, moving everything to a common community infrastructure. We are moving everything to a common set of mechanisms to deliver software platforms and engage the marketplace.

I don't want to be the public face of Sun. I want our innovation and the people who work here to be the public face of Sun.

If you look at our hardware platforms, we are reducing the number of form factors. If you want to pick Intel, AMD or Sparc you can do so with the same infrastructure, the same frames, the same racks, the same power systems, the same thermals. We're building things around a uniform definition of what the future holds and what we are going to present to the marketplace.

You said you're converging to a common open-source license, the GPL?
Schwartz: We are very hopeful that the GPL 3 will give us the opportunity to converge on a uniform license that gives safety and assurance to the developer community as well as safety and assurance to the commercial community that might worry about the impact of open-source, because one company out there wants to tell the world it's unsafe. So we, along with the open-source community, believe that software will be freely available and it will be just as safe and robust and sturdy and secure in open-source form. We would like to make it simpler and easier for both developers and customers to interact with us.

Do you see yourself as the embodiment of Sun? Obviously, to a certain extent you're the public representative of the company.
Schwartz: I don't want to be the public face of Sun. I want our innovation and the people who work here to be the public face of Sun. One of the few things I get to do as CEO is set the culture of the organization. I've been in the midst of an interesting exercise recently to establish a leadership brand for Sun.

A Sun leader has courage, and courage is the courage to innovate, the courage to collaborate, the courage to act with integrity--because that actually does take some courage--and the courage to do so with pace. You've got to be willing to brook the criticism and the critique from those who don't see the world the way you do. When people look back at who is Sun, they are not looking me; they are looking at 35,000 people.

In Silicon Valley, there is an image of the cowboy CEO, with the personality, the high profile--Larry Ellison, Scott McNealy, Steve Jobs. Do you think that's dangerous?
Schwartz: I don't like that.

I hesitate to suggest that you might be slipping into that category, partly because of your visibility. Don't take it with disrespect, but you're a loudmouth. You talk about things, you jump into conversations, you try to provoke people into engaging in some kind of conversation.
Schwartz: I don't mind being a communicator on behalf of Sun. I just don't want people to mistake the idea that I am why we're being successful, because I am not. What I see in a lot of other big-personality CEOs is they are the ones who make all the decisions, and as a result of them, business runs well. The reason I don't like that is just from a risk-management perspective, what if they got hit by a bus or put in jail or they drowned off their yacht?

I don't think that's necessarily what customers want or what shareholders want. I want to do a good job of building a leadership culture at Sun. There are a lot of people who have blogs at Sun, and I don't want there to be one voice to the marketplace, but I want that somewhere in that cacophony to be a very clear and consistent message: here is what we're all about, here is what we can do and here is how we are going to march forward.  

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