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SUN’s McNealy: Uptime is All That Matters

Lake Buena Vista, FL
October 17, 2000

Sun Microsystems Inc. (Nasdaq:SUNW – news) CEO Scott McNealy used the occasion of this morning’s “Mastermind Interview” at the Gartner Group’s IT Expo to hint at good news due tomorrow in Sun’s quarterly financial call.

Responding to a Gartner executive’s question here about fol low-on servers to Sun’s UltraSPARC II, which was described as “long in the tooth,” McNealy quipped, “Our earnings tomorrow will show how long in the tooth it is.” He also said that Sun gre w 42 percent in its fiscal fourth quarter, at the same time acknowledging the long backlog of orders that remain unfulfi lled. “We have to get the lead times down,” he said.

Overall, McNealy on Tuesday advanced Sun’s agenda to create Internet products that are simple for customers to buy and install, removing the requirement that they act as their own system integrators.

In promoting the idea behind Sun’s “Web tone” switch, he said, “I’d love to see our marketeers create one product,” with a small, medium and large option that combines all the functions necessary to bring telephone switch-like reliabili ty to a “BFWTS — a big freaking Web tone switch,” he quipped, taking a shot at Cisco Systems Inc.’s (Nasdaq:CSCO – news) internal code name for its high-performance router, dubbed the BFR (for big fast router).

“You can’t make five nines dial tone with a mix and match environment,” McNealy said, referring to system dependabilit y. He went on to describe Sun’s single-minded focus on a limite d product set that can be easily implemented by customers. He also described a project for America Online Inc. (NYSE:AOL – news) in which Sun created a “Web pod” that integrated all the functions AOL wanted and was able to have it running in 3 hours. ‘One throat to choke’

McNealy also took shots at Hewlett-Packard Co. (NYSE:HWP – news) and other competitors that are moving increasingly into the service provider space. “We’re not competing with our own systems integrators,” McNealy asserted. “Of the majo r computer platforms, we’re the only ones not competing with systems integrators.”

At the same time, Sun is working to ensure that multiple vendors’ software works well together on Sun hardware platfo rms by testing configurations and then certifying them for custo mers. And the company has implemented support programs that offer a single point of contact to resolve issues involving each of those elements. Customers want “one throat to choke” when when there’s a problem, McNealy said.

“Our goal is to get dial-tone ready,” he said. “We want to get to the point where mail is just a feature.” Sun systems should be massively scaleable, integrated and highly availab le. “It’s an incredible engineering problem, but that’s all we do,” he said.

In response to questions about Sun’s increasing moves into software, McNealy said, “Software’s a feature, not an indust ry. I have a million lines of code in my cell phone. There are hundreds of microprocessors in a car today. When was the las t time you bought left blinker software?” he joked. Addressing the IT audience, he said, “You all want a system that is sea mless, is secure and is integrated all the way back to the SPARC.”

McNealy also addressed quality issues and described ongoing work within Sun to create a sense of urgency about high avai lability in Sun systems. He used eBay’s recent 22-hour outage as an example of how he believes Sun must work with customers to achieve high availability.

“We’re paying people for uptime,” he said. “The only thing that really matters is uptime, uptime, uptime, uptime and uptime. I want to get it down to a handful of times you migh t want to bring a Sun computer down in a year. I’m spending all my time with employees to get this design goal” at the forefront of their thinking. Any dark clouds?

As for Sun’s embrace of “dot.com” in its marketing and the possibility of a dot.com backlash, McNealy said Sun is targe ting old economy companies moving into e-commerce as well as conv ergence, at the same time emphasizing that a tremendous amount of ven ture funding is still pouring into Silicon Valley startups. “Half of that goes to marketing, and the other half to us,” he dea dpanned. Addressing the potential threat to Sun posed by Microsoft Corp.’s (Nasdaq:MSFT – news) .Net initiative, McNealy said, “We’re trying to respond to what’s achievable. To me, .Net could be the next SAA,” he said, referring to a large-scale IBM software unification initiative that failed. Sun’s strat egy, he argued, is to embrace open interfaces. “We made Java open like it ought to be,” he said.

Nor is Sun threatened by Intel Corp.’s (Nasdaq:INTC – news) IA-64 processor, McNealy asserted, in response to questions about that chip’s imminent arrival in the market. He also played down privacy issues on the Internet, saying that onli ne is more secure than the real world, where access to medical and bank records is widely available. “The right regulation is market discipline,” he said.