Scott McNealy is one of the four original founders of SUN Microsystems in 1982. Becoming CEO in 1984, he has presided over the building of SUN into a worldwide corporation employing some 30,000 employees, with in excess of $10bn revenue worldwide, achieving Fortune 500 status just over a decade after its launch.
During his time at the helm, SUN has developed new and innovative products to supplement its original networked workstations, including:
- The Java programming language
- The SPARC multi-core system
- The high-performance Niagara chip, and
- The Solaris Operating System
There have been many challenges to overcome in SUN's story. After the huge success of its workstations (achieving £1bn turnover by 1998, SUN was faced with significant problems resulting from over-rapid growth. There had been a heavy emphasis on gaining market share, often at the expense of profit margins.
In response, McNealy instituted changes that showed his maturity as a business leader. He put new focus on cost control as well as growth, and made the crucial decision to consolidate SUN's products, basing everything on the new SPARC chip, and discarding products based on Intel and Motorola - a risky decision at the time. At the same time he reorganised the company into seven product-line oriented planets, a move which encouraged innovation.
This positioned SUN well for the explosive growth of the Internet in the early 1990s. The significance of McNealy's slogan "The Network is the Computer" finally crystallised, and SUN workstations evolved into powerful network servers. The launch of JAVA also identified SUN as a leader on Internet-based technology, and by the end of the decade SUN's revenues had grown to well over $10bn.
Things have been less rosy for SUN, and for McNealy, since the Millennium. With the crash of the dot.com boom came a reduction in technology spending, together with fierce competition from companies producing cheaper alternatives.
A boardroom change in early 2006 led McNealy to move to Chairman of the Board of SUN and Chairman of SUN Federal, with Jonathan Schwarz taking over as CEO. Meanwhile the shift in SUN's positioning vis-a-vis the Wintel world seems to be showing positive results, with SUN revenues now growing again, in contrast to a continuing slow reduction in server shipments.
Scott McNealy has a reputation as a strong and interesting individual. Unlike most people involved in high technology industries, he did not come from the world of amateur programmers, hackers and computer scientists. Instead, his background is from the business end, having graduated from Harvard University with a Batchelor of Arts in Economics and receiving his MBA from the Stanford Graduate School of Business. Furthermore, his early industrial background in manufacturing would not appear to have marked him out for the career that he carved out for himself.
His success rested upon his determination, business acumen and ability to motivate those who worked around him. Many analysts also cite his willingness to take risks and reinvent the company in order to adjust to changing industry conditions.
He gained a reputation early on as a brash and aggressive CEO, notorious for his outspoken comments about business rivals - particularly Microsoft. However, those who worked closely with him emphasis his business insight, his appreciation of his co-workers, and his ability to relate to many different types of people.
His willingness to poke fun at himself and his rivals has resulted in memorable wisecracks and some colourful publicity stunts, making him one of the more unconventional CEOs in corporate America. In a 1996 Business Week article Sun's former treasurer, Thomas J Merddith, saw this as one of McNealy's key strengths: "his humour and ability to raise a crowd to its feet is in many respects exactly what you need in CEOs and leaders of today's industry".
His many and famous quotes will ensure him a place as one of the true characters in the industry. The company’s Friday afternoon beer busts offered heroic demonstrations of the boss’s ability to quaff a few right along with all the regulars, while SUN’s internal April Fools’ Day pranks were even more legendary. Through it all, McNealy’s puckish sense of humour often cut through the day-to-day stress of the thousands of people engaged into building a world-class company.
While McNealy could not be regarded as a typical CEO, the company he built in many ways typified the energy, the innovationary spirit and the technological achievement that was associated with Silicon Valley during the last two decades of the twentieth century.