Q&A with Sun President and COO Jonathan Schwartz

While I was away, I hope you enjoyed the updates on the VORTEX 2004 program, which is now fairly well nailed down. Geoff Moore and I have a great event planned for you and, in the weeks leading up to VORTEX, we’re going to be offering perspectives from some of the top executives on the agenda.

The shepherd always tries to persuade the sheep that their interests and his own are the same.

Henri Stendhal

Dear Vorticians,

I’m back from a couple of weeks in the bucolic back woods of Maine, where there’s little discussion of local loop regulatory policy, utility computing or services-oriented architectures. Instead, the discussions center around loon sightings, sunsets and appropriate cocktails for the aforementioned termination of the diurnal phase.

While I was away, I hope you enjoyed the updates on the VORTEX 2004 program, which is now fairly well nailed down. Geoff Moore and I have a great event planned for you and, in the weeks leading up to VORTEX, we’re going to be offering perspectives from some of the top executives on the agenda.

Starting things off is Jonathan Schwartz, president and COO of Sun. Sun, a longtime leader in Unix-based, high-performance computing, faces a variety of well-publicized challenges and we wanted to ask Jonathan how the company is trying to morph itself to meet the evolving requirements of its enterprise customers.

As always, I welcome your thoughts on Jonathan’s thoughts and any other issue on your mind. Brainstorms should be directed to mailto:jgallant@vortex.net.

What are the key changes in the needs of your enterprise IT customers?

To see through the hype and rhetoric, to understand the real technology issues and trends that will define their economics and security models. It’s never been more opaque or risky – and it’s incumbent upon Sun and its partners to drive clarity of vision and solution.

How, specifically, is Sun responding to those changes?

We’re taking on conventional wisdom. We’re making Solaris available on every platform known to man, using disruptive pricing and delivery vehicles to drive up the value of shared services infrastructure, and innovating in places like identity and security, where customers are putting their money – and their professional reputations. In addition, we’re continuing to redefine the economics of computing, storage and network services with the strongest product line we’ve had ever. Period.

What are the key success criteria as Sun tries to renew growth?

The single biggest obstacle we’re facing at Sun is perception. Our technology is not the issue. We continue to be in step with where the market is headed. Our challenge is to move Sun back into profitability and win back the hearts and minds of Wall Street. So, my first priority for the organization in the remainder of this year and throughout 2005 is to become profitable.

How will we know if we’re headed in the right direction? I view ecosystem momentum, an expanded footprint and increased recurring revenue as Sun’s leading economic indicators. And we’re seeing great signs. Our year-over-year server shipments grew 35% and we maintained our leadership position in the Unix server market. Our x86 server line – built on AMD’s Opteron chip – is booming and Solaris downloads on the Intel, AMD and SPARC platforms continue to grow. Java is now on more than 1.75 billion – that’s billion with a ‘b’ – devices around the world as what we call the ‘Java Economy” continues to expand. There are 40 million distributions of StarOffice/OpenOffice, the leading competitor to Microsoft Office, across the globe providing customers with real choice on the desktop. Our Java Enterprise System is serving 300,000 employees through its subscription pricing plan in only its first six months of availability. The list goes on and on.

Couple all of this momentum with the $8 billion in cash we have for strategic investments, new products on the horizon, and the long-term deals we recently inked with Fujitsu and Microsoft and I’m very optimistic about our future.

**

Jonathan’s initial comment on the “hype and rhetoric” customers have to wade through is particularly relevant to the VORTEX agenda. As we’ve outlined, our goal is to help industry executives and CIOs understand the key issues shaping the enterprise market and see more clearly where the leading players and innovators are headed. To join us in this mission, register at http://www.vortex.net. We hope to see you there.

As noted earlier, share your thoughts on Sun or anything else by writing to me at mailto:jgallant@vortex.net.

Bye for now.