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D3: Scott McNealy’s Information Utility

Kara Swisher is chatting to Scott McNealy, the Chief Executive of Sun Microsystems. Scott seems entirely unchanged from how he looked when I first met him ten years ago: he is stilll the smartest guy in the Frat House. He…

Kara Swisher is chatting to Scott McNealy, the Chief Executive of Sun Microsystems. Scott seems entirely unchanged from how he looked when I first met him ten years ago: he is stilll the smartest guy in the Frat House. He still talks in a curiously lock-jawed monotone. He is the funniest speaker so far, his humor nicely dependent on understatement and sarcasm. Kara begins by showing a series of out-takes from previous D conferences, where a succession of Scott’s peers (billg, Carly Fiorina, etc.) happily predicted Sun’s demise. At the end of Carly’s soundbite (where the fired chief executive of H-P could barely contain her joy), Scott just sat silently for a little while, and then muttered into his mike, “Sometimes I don’t have to say anything.” He pointed out that Sun has been profitable for 16 straight years, has $7 billion in cash–and then gracefully drops the subject. Scott explains Sun’s businesses in aggressively unglamorous terms. The company sells embedded systems to Original Equipment Manufacturers; and it also sells computers and networks so that chief information officers can build their own data grids. But Sun’s latest business is the most interesting: the company is creating information utilities for those who want to rent them. This makes sense to me. Why should companies create their own data grids at vast expense? Why not let Sun run a more technologically sophisticated grid–and then lease time on that utility? The resistance to this idea must derive from the pride of CIOs; it’s certainly not an economically rational decision.

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