McNealy sheds light on Sun's Web world

"Four years ago we were going to be NT road kills. Now they're the convicts and we're doing OK."

Sun Microsystems outspoken chairman and CEO Scott McNealy is never short of a good quote, and this is no exception.

In Canberra last week to address the National Press Club, McNealy offered his vision for creating dot-com businesses, told Australia where it's going wrong "because we asked", and announced new venture capital investments in the region.

And for quote-hungry journalists, his offhand dismissal of rivals such as Microsoft ("convicts") and HP ("a big printer company") provided the much sought-after entertainment.

Behind the theatre is a serious - and familiar - message for the channel from a company that understands its role in life: get Internet-savvy and know your core business.

When asked about the future of Sun's revenue breakdown between software, hardware and services, McNealy said he just wants to keep selling "big friggin' Web tone switches".

Sun's core business in hardware and software platform sales is still the key to success, but the Internet itself is creating the market and reason for those sales, McNealy said.

The reason for avoiding bolstering services revenues is apparently his wish to avoid direct competition with the services arms of telcos and service providers.

When asked about rumours of HP's interest in aquiring PricewaterhouseCoopers' consulting business to build a services business, McNealy indicated it was a trend that's not worth following. "A tough job will be to follow [IBM CEO] Lou Gerstner," he said.

Large corporates and government departments are not interested in buying an operating system or specific code, they want a total system, McNealy said. "Whoever wins [the deal] gets the whole room," he said.

However, he believes the real e-commerce opportunities will be online markets where anyone can participate. As a result, "spot markets" such as trading exchanges will proliferate and cater for almost any product or service.

The immediate impact is dramatic: "Price lists are wrong the day they are put up."

On the service providers front, his key message is: "He or she with the biggest directory wins; that's the race".

Customer acquisition remains the name of the game for the "bricksters", he explained. "You can't be all clicks and you can't be all bricks.

"It's way easier to put up a Web site than put up General Electric."

Meanwhile, developing as a dot-com business remains Sun's mantra. McNealy explained he still believes we have to cope with the fact that we are all "hopelessly behind" in the development of Internet technologies.

Sun is addressing this situation positively by developing "MySun" Web portals for each community in contact with the company - from resellers to suppliers.

"My thesis is the Internet is under-hyped," he said.

Anything with an "electrical heartbeat" from light globes to fridges, will be connected to the Internet, McNealy claims. "I believe we are in the biggest equipment industry of all time."

Investments

McNealy also announced last week the company will spend $US50 million on investments in the Asia-Pacific through its newly formed Sun Asia-Pacific Venture Investment Program. Sun's investment is part of a total of $250 million made available through the program, courtesy of co-investments from local partners, to support new Internet, communications and e-commerce business in countries including Australia, Japan, Korea and Taiwan.

In addition, McNealy announced Sun has established four technology grants worth more than $1.6 million to support online learning in Australian schools. Each of Sun's "Sunburst Schools" will receive a Sun Ultrasparc Server and 100 SunRay devices, including training, support and maintenance for three years.

Sun Microsystems is set to bring home revenues of between $US20 and $22 billion this fiscal year, which McNealy claims represents around a 34 per cent rise in revenues.

Mark Jones travelled to Canberra as a guest of Sun Microsystems.

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