Scott McNealy's Sun Microsystems
created Java, and its servers help make the Internet run.
This CEO looks beyond current market turmoil to what's
perking in Internet technology.
Like most technology companies these days, Sun Microsystems is
still reeling from the bursting of the dot-com bubble. But chairman
and CEO
Scott McNealy sees past the current cutbacks in tech
spending to a near future where the Web has changed companies from
within, and access to the Internet is as ubiquitous as the water
faucet.
As the world's second-largest provider of the servers that are
linchpins of the Web, and crea-tor of the widely used Java computer
language, Sun's future depends heavily on the Internet. McNealy
says the "fast and crazy" downturn is just a temporary obstacle.
The new Net-powered world has just begun.
McNealy, 47, co-founded Sun in 1982 and was appointed CEO two years
later - a supposed temporary move, because McNealy knew little
about computers. But he showed himself as a formidable manager, and
eventually became the de facto leader of an entire industry based
on "open" alternatives to the proprietary software espoused by
Microsoft
and others.
American Way asked McNealy to look past current conditions
and shed some sunlight on the next direction of technology.
American Way: We've recently seen a severe pullback in
technology spending in the U.S. What will turn around the
slump?
McNealy: Once people started to recognize the potential of the
Internet, the run-up was only natural. We could see the Net had the
power to change the way we communicate, work, play, learn - and it
has. Unfortunately, some of the business models people came up with
were not sustainable. So the old idea of dot-coms - two guys in a
garage with $10 million in
venture capital and no business plan -
is over. Meanwhile, the idea of "dot-comming" - Fortune 1000
companies leveraging the Internet to digitize and automate their
businesses - is just beginning.
It's not about selling perfume online. It's about using the Net to
improve operations inside and outside your company - all through
the value chain - and the world is still in the early stages of
that process.
AW: What factors will affect global business over the next five
years?
McNealy: We've been saying for years that the Net is about much
more than opening online storefronts. It represents a more
cost-effective way to run nearly every aspect of the enterprise -
inventory, billing, distribution, customer service, employee
communications. That goes for the whole supply chain as well. Most
companies get that now. They're interested in using the Net to save
money and work more efficiently.
AW: What's your prediction for how bandwidth [the ability to
download data at high speeds] will increase in the U.S. and the
rest of the world, since this is critical to delivering so many
next-generation high-tech services? Are we facing a crisis?
McNealy: Over the past three years, bandwidth has doubled about
every nine months. Compare that to processor speed, which doubles
about every 24 months, and it's pretty clear that bandwidth is not
going to be a problem. A single fiber-optic strand can carry the
equivalent of 400,000 DVD-quality movies streaming down the line
simultaneously, and there may be 800 or more strands in a
cable.
So when are we going to see all that capacity put to use? Already
about 85 percent of all commercial buildings in the United States
are within a mile of dark fiber - fiber that has been installed but
is not being used, is not lit up. It's that last mile that has been
the sticking point so far, but there are ways around the problem.
Fixed wireless, for instance, can deliver about 100 megabits per
second to any home or office within range of a relay station,
significantly reducing last-mile costs.
AW: Will the Internet service provider infrastructure be able to
handle the expected increase in the demand load? And how can
executives handle the information overload that implies?
McNealy: It's our job as an infrastructure supplier to build
the products that will keep these companies ahead of the curve.
Certainly, the challenges - and opportunities - are going to be
enormous. We're seeing exponential increases in bandwidth, data,
devices, and users - and that's the world we're addressing with our
new products and our ongoing R&D.
The big opportunity is to harness the information explosion, to
transform information overload into smart Web services that do a
lot of the work for you. That's what the Sun Open Net Environment,
Sun ONE, is all about. Imagine a calendar service interacting with
a map service, so that your car gives you directions to your next
appointment without having to be asked - it could even interact
with a traffic service to help you avoid delays from road
construction or a stalled vehicle. That's just one example.
Millions more smart services are possible - and they're being
developed today.
AW: One of the services greater bandwidth will enable is the
application service provider model of computing, in which software
users will essentially rent applications over the Internet instead
of buying them for installation on each desktop. How well will the
ASP model be accepted?
McNealy: We believe that service providers will revo-lutionize
business in ways that selling dog food online never could - saving
companies money and freeing them to concentrate on their core
business rather than technology. Some cultural hurdles still need
to be crossed before outsourcing reaches its true potential, but I
think we're getting there. It's all about trust and quality of
service, which we're addressing with our SunTone certification
program. The SunTone program sets rigorous standards for building a
highly reliable, highly scalable service-delivery environment -
from architecture to operations, applications to security, service
policies to technical competencies.
AW: Are you confident that the wireless infrastructure will meet
demand in the U.S. and the rest of the world? What technologies is
Sun betting on?
McNealy: I would never bet against bandwidth. The opportunity
cost of not meeting demand is just too high.
Wireless technology is
a key element in delivering highly personalized, context-aware Web
services, and the opportunities there are way too incredible to
pass up. The benefits of smart services are innumerable, the
potential market unbounded. But to work, these services cannot be
tied to any single company or platform. So, as usual, we're betting
on open standards. That's very different from
Microsoft's .NET
vision [the company's
ASP initiative for Web-based software].
AW: Explain something you've been pushing that you call portal
computing and how you see it unfolding.
McNealy: Everyone knows about Web portals such as
AOL and
Yahoo. Imagine extending that concept to provide specialized
applications and services to customers, suppliers, partners - even
your own employees.
At Sun, custom portals enable us to meet the unique needs of
software developers, equipment designers, technology partners, and
early-access participants - all kinds of individual companies,
collaborative groups, and special-interest audiences that we engage
with everyday. Through specialized content and services, we do our
best to give everyone just what they need - anytime they need it,
from any network device. The same is true for our own employees.
They're able to work from home or on the road through a secure
portal that gives them access to all the Web-based tools they have
at the office - e-mail, calendar, address book, payroll, expense
reporting, and benefits management.
AW: You recently acquired InfraSearch, a peer-to-peer technology
best known for its use in file-sharing systems such as Napster. How
do you see the P-to-P field developing?
McNealy: The technology under development by InfraSearch is a fully
distributed, peer-to-peer
search engine that has the ability to
return richer and more timely content on the Internet. We already
have a P-to-P research project called JXTA, and this acquisition
should strengthen and accelerate that. I'm a total believer that
peer-to-peer is going to change the way we work and play. It's
going to change the balance of power between consumers, service
providers, and businesses. This is radical stuff. Keep in mind,
though, that not every application lends itself to a peer-to-peer
model. Many will continue to use the traditional server back end.
AW: When do you see your vision of a ubiquitous Net becoming a
daily reality for a majority of executives in the U.S. and Europe
and what will that be like?
McNealy: You can get Internet access in most airports and
business-class hotels today. Cars will be Web browsers with wheels.
In fact,
Detroit sees online services as a bigger revenue generator
than the cars themselves. Then there's all the mobile phones,
pagers, and PDAs out there. The Net is nearly ubiquitous now, and
all the different points of access have the potential to make our
lives much easier.
Here's an example: Say I get a message telling me my next meeting
has been delayed. A smart Web service would recognize from my
online calendar that the delay makes it impossible for me to make
my dinner reservation, so it would auto-matically tap into my
online reservations service and change the reservation for me. But
let's say it finds the restaurant can't accommodate me at a later
time. Well, this is a smart service. It finds another restaurant -
similar in location, style, and price - and makes a new
reservation. Then it updates my calendar and notifies me via my
pager. That's not just smart, it's incredibly handy.
AW: Will we still have laptops in 10 years? What will be the
biggest surprises?
McNealy: Actually, I don’t have a laptop today, but I understand that some people are still lugging those things around. The big surprise will be the disappearance of the Internet — though it will probably happen so gradually no one will really notice. The Net will still be here, of course. It will just become invisible. You won’t think about it any more than you think about water,
electricity, or telephone service today. The Net will be a utility you use when you need it. AW
mcnealy on managementhere’s what sun’s chairman and ceo says about managing in a high-tech world.
recruiting people: “people want to change the world, make it a better place to live. offer them the chance to do that, and you’ll attract bright, dedicated people.”
retaining people: “we like to give our people some rope and let them venture out a bit. we only yank on the rope when absolutely necessary.”
decision-making: “good decisions depend on good data. too often we think we understand the situation, when in fact we don’t have the right data.”
business pet peeves: “i try to look at business from a customer viewpoint, so any defect in a product or service or process becomes a pet peeve. i also hate finger-pointing. if a customer has a problem, i don’t want [employees blaming each other]. i want them to work together to solve it.” —