Steve Jobs may be the best in the business at mesmerizing a crowd, but Jonathan Schwartz of Sun Microsystems rates consideration as a very serious No. 2.
When it comes to pitching his company, Schwartz is the sort of articulate and passionate CEO that boards covet in these extra-PR-conscious times. Is he all that good? Put to the test, I think he'd have decent odds of convincing a zebra that stripes were yesterday's fashion.
Jonathan Schwartz: What does he know that the others don't?
(Credit: Stephen Shankland, CNET News)But while Schwartz is steadfast about Sun's ability to achieve great things, the big difference is that Jobs sells cool stuff that its customers consider to be so much better than that offered by the competition. At Sun, well, it remains a slog.
The company just last week announced it had lost $209 million in its fiscal second quarter on an 11 percent drop in sales. (If you subtract the special charges, Sun actually would have finished with a 15-cent-per-share profit.)
The earnings report came as a mild upside surprise on Wall Street, which had feared worse after the financial sector's meltdown during the fourth quarter of last year. Still, sales remain headed in the wrong direction as the company has now suffered year-to-year declines in each of its last four quarters. It doesn't help that Sun is getting squeezed from opposite directions with IBM and Hewlett-Packard at the high end of the server business and Dell (and HP again) on the low end.
So I was especially curious how Schwartz would deal with current events when he presented a status update on Sun's business Monday morning. What can I say, but the guy still has the touch.
This was a textbook Jonathan "special" where you come away dutifully impressed at his ability to peer through the clouds. As his Schwartz's wont, he liberally dropped mentions of (unnamed) bigwigs at this or that (unnamed) major "financial institution" assuring him that they understood the importance of investing in (presumably, Sun) technology in order to stay ahead.
And there was no shortage of telling anecdotes. At one point, Schwartz related how a "leading" technology decision maker with one of the world's largest financial institutions shared this morsel: Yes, it's reexamining what it spends. Who isn't? The more important intimation: this institution intends to accelerate spending in other areas where it thinks there will be opportunity.
All that was prelude to Schwartz's main argument that technology spending will figure as "a critical part" of the economy's recovery (whenever that might take place.)
What followed was a brilliant disquisition on the role of innovation during times of crisis and how "cloud (computing) was fast becoming the "one conversation people want to have across the world." (I thought it was Christian Bale but let's not quibble.) Schwartz's line of argument naturally fed into a scenario marked by sharp demand for more servers and storage, the two product areas which coincidentally pay the bills at Sun.
Truth be told, it was a compelling performance. I just wonder how long it's going to take before the story line ever jibes with facts on the ground. Panglossian optimism has its place, but Sun's CEO insists on painting a sunny picture that never quite takes shape as envisioned. Indeed, he's been painting the cloud computing picture for years now. Then come more losses, layoffs and let downs. Seems that it's been this way since the dot-com bubble burst.
I'm not arguing Sun's in any danger of going under. In fact, it can probably fare quite nicely as a (much) smaller, open-source software company. But that doesn't fit with Schwartz's vision for Sun. And while I am keeping my fingers crossed, the repair of the economy will take quite some time. So at what point do we declare his vision a pipe dream and just move on?
Amazing how much Twitter is dominating the conversation of late. So at the risk of "all Twitter, all the time" overkill, I was intrigued when Sun Microsystems' Jonathan Schwartz recently confessed to Tim O'Reilly that, yes, he Twitters, but no, he won't fess up his user ID for public consumption.
Schwartz: So two Twitters walked into this bar...
(Credit: CNET News.com)Sun's CEO twitters? Cool. Then again, he is an early adopter. Schwartz was one of the first and most frequent users of corporate blogs to get out the word. Of course, not everyone agrees about the amount of credit he deserves. Waggener Edstrom's Frank Shaw says Schwartz is wrong about blogging. My take: Shaw is wrong about Schwartz being wrong about blogging. More than any other CEO, Schwartz has become the face of corporate blogging. But that's a side debate for another time.
The more interesting question now is, how far off are we from the day when Schwartz and his fellow CEOs reach for Twitter when they want to get out the message? My hunch is that this is going to be a generational issue, and Schwartz sees a similar evolution. So I asked him about the likelihood he and fellow CEOs will take the next logical (and technological) step. Here's what he had to say:
Q: As it applies to CEOs of public companies, are there any different requirements which might govern their twittering?
Schwartz: Well, I don't use Twitter to discuss Sun's financial performance. I use it to keep in touch with my friends and relatives. So I'm sure there are some that use it (as with any messaging service) for business purposes...For me, it's a tool to keep me close to my social circle, not my professional circle. (For that, I use LinkedIn and Facebook.)
We've seen more CEOs take to blogging. But Twitter's a bit of a different use of the technology. It's more immediate and more interactive. Do you see it being embraced by CEOs as more of a mainstream tool of conversation?
Schwartz: No, but then again, that's just me. And at 42, compared to some of the CEOs I met at O'Reillys' Web 2.0 fest, I'm an old guy. As choices emerge, demographics and preferences become more important--the good news is, we all have different choices today than even five years ago. And once those choices sediment, it's tough for people to change. I used to know senior execs who had their e-mail printed out. That's mostly gone.
The example I use is this: When's the last time you learned a new (spoken) language? It's a lot easier for a 3-year-old to learn a new language than a 30-year-old; the same applies to social infrastructure (although I'd like to believe the hurdles are a lot lower). People change all the time, so do communication preferences and technologies.
Are we still far from the day when CEOs will start announcing real news on their Twitter feeds, or do you think it will be more of, "Hey, I just fed the cat" kind of stuff?
Schwartz: That's like asking "what will people do with ZFS?" or "what will people do with the Internet?" What people do with Twitter will be dependent upon who they are and how Twitter evolves. Both represent limitless opportunity...Do I expect news to be broken on Twitter? Yes. Financial news? Why the heck not?
A colleague points out that Tony Hsieh, the CEO of Zappos, is already Twittering up a storm. Talk about change on the fly!
PALO ALTO, Calif.--Anne Mulcahy and Jonathan Schwartz became the latest technology CEOs to call on the government to let more foreign-born computer engineers into the United States.
Anne Mulcahy and Jon Schwartz
(Credit: Charles Cooper/CNET News.com)"You have to raise the quotas," said Mulcahy, CEO at Xerox. Schwartz, who runs Sun Microsystems, struck the same theme.
The message went down well with an audience of Silicon Valley elites gathering at Stanford Friday for a daylong conference on political economy. Then again, they were facing a free-trade crowd of true believers, including headliners like eBay's Meg Whitman and former U.S. Secretary of State George Schultz, as well as guys representing big investment houses, venture capitalists, and money managers.
I doubt their pitch would go down as well in places like Ohio or Michigan. So far, however, the H-1B debate hasn't turned into a divisive presidential campaign issue. Neither the Clinton nor Obama camps have taken up the question. Ditto for John McCain. High-tech companies like Xerox and Sun want Congress to raise the cap on employee-sponsored green cards and offer quota exemptions to foreigners with serious math or technology chops. SIA President George Scalise, who is sitting 10 feet away from me, wants to give green cards to talented foreign students.
"It gets worse each year because our needs are greater," Mulcahy added. But if I'm reading her correctly, Xerox's boss doesn't have any confidence that legislators are going to move quickly.
"We have just been stuck on inaction in this country. It's not pros or cons. It's inaction, it's the political polarization in this country that has made for extraordinary problems.
"Having access to international talent is a big part of what's fueled our technology industry," she said. "The statistics about new companies that have started up the last ten years and the number of founders who came from outside this country...I mean, this is just dumb."
"So you put a limit here, we'll go hire there," Schwartz added. "We're not dumb."
Former U.S. Secretary of State George Schultz
(Credit: Charles Cooper/CNET News.com)So why can't tech's power elite get Washington to blow in its direction?
"Damned if I knew," he said. "We've all tried. We've all done the perpetual flights to Washington to talk with them...there's an element of, "Does that drive my election?" It'll help this room. This room doesn't represent a lot of voters. It represents a lot of money."
That got a good laugh out of the swells, but I think Mulcahy nailed it with her answer.
"There's a perception that global trade and big business is leading to losses in the economy and (politicians) don't want to get on the wrong side of that argument."
That's the way things work in Washington but Schultz said the tenor of the battle over H-1Bs may take on a different look after the November election.
"A year or so ago, an effort to get comprehensive reform in immigration was tried with the (backing) of the President and Senators McCain and Kennedy. In the end, it didn't fly. But that was the right track. All the people who were running against that idea (in the primaries)--have since lost. So that's progress and let's hope that it continues."
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