Sun chief steps out of McNealy's shadow

Q&A

After just over a year as chief executive, Jonathan Schwartz is moving into a new phase as the leader of Sun.

Many of his opening months were spent emerging from the shadow of the highly visible Scott McNealy, boosted by Schwartz's high-profile blog. Now that the introductory period is over, Schwartz is working to show that the Silicon Valley stalwart can regain its former stature.

As Schwartz points out, Sun's stock has risen 28 percent in the year since he took over as chief executive, although he credits his predecessor for the improvement. But the company has its challenges. A strong close to 2006 was followed by a spotty, if still profitable, opening to 2007, with revenue of $3.28bn (£1.65bn) and net income of $67m (£33m).

Schwartz is bringing his software imprint to the company, aggressively embracing the free and open-source programming movement, preferably with the upcoming version 3 of the General Public License (GPL). He's even trying to rebuild Sun's lacklustre storage business by engaging with programmers interested in storage software. In a perfect Schwartz world, all customer interactions would begin with a conversation about Sun's Solaris operating system.

During Sun's JavaOne software conference earlier this month, Schwartz spoke about his first year and the future of Sun.

Q: What's your own assessment of how well you've done in the first year?
A: Well, it partially depends on what axis we're measuring our progress with. One that I care about the most, the long-term creation of value for our developers and shareholders, actually gave us pretty high marks. The one thing we've done indisputably is re-established our technical relevance. The global success of JavaOne, which will probably have [had] our broadest, largest attendance ever, proves that we are very much central to the evolution of network computing.

The success of the OpenSolaris community — the fact that we have been able to drive nearly eight million downloads in the past two years and 70 percent of those have been onto HP, Dell and IBM hardware — is a validation of our focus.

I'm not going to give myself a letter grade. The single best grade for my management team's performance is our share price

Jonathan Schwartz, Sun

Secondarily, looking at our financial metrics, I feel pretty good. We have expanded gross margins, we've grown the top line [revenue], we generated a GAAP profit two quarters early. There's a lot more to do. We're a $14bn (£7bn) company in what looks like a $2 trillion (£1 trillion) marketplace, and it seems like we've got some more growing to do. We can always be more efficient than we are right now and we've still got some work to do there.

Would you give yourself an A, B, C, D or F?
I'm not going to give myself a letter grade. The single best grade for my management team's performance is our share price. It's gone up. We're having such a different interaction today with customers and partners. You have to remember that two or three years ago it was not a pretty picture. We had a lot of folks who were writing us off or counting us out. No-one today is writing us off or counting us out.

A lot of your financial recovery has been in part because you bought a lot of revenue by acquiring StorageTek, and you recovered somewhat at least in your bread-and-butter server business. What about all these other projects — Solaris and open-source software in general, storage, the Sun Grid?
First of all, the growth that we've posted this year has been pure organic growth. It's been more than a year since we acquired StorageTek. Second, gross margin is a derivative of the operational efficiency as much as it is the products we're building and the value we're delivering.

We will continue to invest on the edges of innovation. But at $13bn (£6.5bn) to $14bn (£7bn) in scale, to have a material impact on Sun, you're going to have $1.3bn (£655m) or $1.4bn (£705m) of revenue. That's not going to happen from any new initiative necessarily in a quarter or two or three. I would claim the single most important element in the resurgence of Sun has not been the rise of our server business, but the rise of our Solaris business. Solaris is now firmly established as the definition of scale and security and robust web-scale operation.

I would claim the single most important element in the resurgence of Sun has not been the rise of our server business, but the rise of our Solaris business

Jonathan Schwartz, Sun

We still have some work to do — I'm still not pleased with how accessible it is to new developers or the number of college kids that are running it, but, in terms of its position in the enterprise, that at this point is unassailable.

You derive some services revenue from software. Can you break out how much you get from Solaris?
This is a complex problem. [Suppose] I ship a [Sun Fire X4500] "Thumper" into the marketplace — it's a two-socket server that runs Solaris that has 24 terabytes of storage in it. We record that as storage revenue. Is there a reason I shouldn't record that as a server? And, by the way, it runs Solaris, so…

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

  • Login

Will not be displayed with your comment

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

Roberto_Store

Now On Sale, Unlocked iPhone 4S / Galaxy Note In Factory Box. Roberto-Techie(UK) ”Now on Sales” Smartphone, Android,Tablets,Gadget &...

1 hour ago by Roberto_Store on Samsung Galaxy S III lined up for sale
Paul Smyth

Is this classic FUD? One thing I would definitely have notice is a Mozilla threat to stop supporting GNU/Linux.

3 hours ago by Paul Smyth via Facebook on Firefox rapid release improves Fedora Linux
UnderINK

I agree with the previous commenter wholeheartedly. I couldn't say it better myself. This is very 'Big Brother'. And while I agree with protecting...

7 hours ago by UnderINK on European e-identity plan to be unveiled this month
Simon Bisson and Mary Branscombe

Nice to see that Turing's idea of a general purpose computer doing once-hardware-powered tasks in software is now universal ;-) Mary

12 hours ago by Simon Bisson and Mary Branscombe on Software with everything
Jason Burchell

seriously now. I've only bothered to read a small bit of the comments. do me and the rest of the world a favour. stop saying it does not work or...

16 hours ago by Jason Burchell via Facebook on Music industry negotiating over 24-bit downloads
Philip Charles Cohen

Read about it and weep, John Donahoe ... In addition to Visa’s V.me, there is now MasterCard’s PayPass digital wallet soon to arrive; another...

20 hours ago by Philip Charles Cohen via Facebook on PayPal takes phone-based payments to the high street
apexwm

Leslie Satenstein : Where have you ever seen Mozilla even mention this? Firefox is the most popular browser in the GNU/Linux OS, so I don't see...

21 hours ago by apexwm on Firefox rapid release improves Fedora Linux
songmaster

SHleG: Do you remember building a clockwork scorpion kit (I'm pretty sure I have a photo of it somewhere) — I think it was called something like...

23 hours ago by songmaster on Software with everything
Chris Wortman

Good I love Yahoo! Their search engine is getting better than Google as of late. I find more of what I want on the first page, and usually within...

23 hours ago by Chris Wortman via Facebook on Linux Mint 13 ramps up for KDE release
PatrickG

openhgs has made the point for Windows 8 multiple monitors without realising it! With Windows 7 you have to switch the mouse and so your focus...

1 day ago by PatrickG on Windows 8 could speed multi-monitor uptake
Leslie Satenstein

Mozilla has threatened to stop supporting Linux. I guess that UBUNTU is going with another browser. I indicated that if Mozilla stops supporting...

1 day ago by Leslie Satenstein via Facebook on Firefox rapid release improves Fedora Linux
Andy Bolstridge

Much as I abhor Microsoft's licensing practices, this is almost certainly down to purchasing IT equipment via 3rd party consultants - you get the...

1 day ago by Andy Bolstridge via Facebook on 6 million wasted licences and £1,200 PCs: welcome to government IT
Jack Schofield

@openhgs Windows users have had multiple desktops since Linus started writing Linux. They just haven't shipped as standard because not enough...

2 days ago by Jack Schofield on Windows 8 could speed multi-monitor uptake
Jack Schofield

@Phil at Cloud4 What, Microsoft gets £1,200 per PC and £1,622 per server? Gosh, I'm amazed....

2 days ago by Jack Schofield on 6 million wasted licences and £1,200 PCs: welcome to government IT
craigsc

You guys have no idea what is going on at Autonomy. Autonomy could have been a much more profitable organization. The sales operations at Autonomy...

2 days ago by craigsc on HP cuts 27,000 staff as Autonomy chief Lynch leaves
Moley

How does this impact on dual or multi booting? Seems to me to more or less prohibit this, from Windows 8 anyway. Will Grub 2 recognise Windows 8,...

2 days ago by Moley on Windows 8 start-up speed forces USB boot workaround
apexwm

I don't understand why there cannot be a slight pause during the boot process so the user can press a key. Many operating systems do this, even if...

2 days ago by apexwm on Windows 8 start-up speed forces USB boot workaround
Gavin Goodman

You can now buy the Xi3 modular computer in the UK at http://www.ocdistribution.com . This can be bought with the Tand3m software, pricing and...

2 days ago by Gavin Goodman on CES 2012: Xi3 microSERV3R
Phil at Cloud4

I agree: Mike Lynch can clearly build a business and manage strategy. I suspect the exit of Mike is more likely the end of a planned handover...

2 days ago by Phil at Cloud4 on HP cuts 27,000 staff as Autonomy chief Lynch leaves
Phil at Cloud4

This is unbeleivable government wastage with only one winner... Microsoft 1 - Tax payer Nil!

2 days ago by Phil at Cloud4 on 6 million wasted licences and £1,200 PCs: welcome to government IT