Tuesday, April 25, 2006

Exit Two Icons: McNealy & Kumar

This almost slipped my commentary, but yesterday was a watershed moment for two icons of computing and the Dot-Com era: Sanjay Kumar of Computer Associates, now known as CA, and Scott McNealy of Sun Microsystems

Sanjay Kumar
Sanjay Kumar was one of those guys I looked at back then and wondered where I went wrong. A year older than I am, Kumar had archieved a lot in a relatively short time. Impressive, and he was soft-spoken - compared to his predecessor, Charles Wang. He also did not seem to have the ego of other CEOs of the dotcom era. It came as a sad surprise that he was actively involved in a scheme to prop up the fortunes, and stock price of Computer Associates.

Yesterday, he pled guilty to obstruction of justice and securities fraud charges. A shame.

Scott McNealy
"The Dot in Dot Com", "The Network Is The Computer". Anytime I think of the nascent days of the Internet, I cannot help but remember those slogans describing Sun. At the time, Sun could do no wrong, the SPARC CPU (and its derivatives) were untouchable, and it had initiatives up the wazoo.

Let's go WayBack: Kim Polese & Java, SPARC, Sun Workstations, Solaris OS, etc., etc. This company was the Dot-Com in dotcom.

At the helm of all this was Scott McNealy, the intelligent, Ivy League-educated, boyish CEO with the acerbic wit and caustic tongue, master of the soundbite.

Unfortunately, he fell prey to three things: hubris, a fiixation on all things Microsoft, and the lack of a (business plan) parachute.

Hubris. When you are on top, all of a sudden, your success, for some, seem to have been ordained by a divine power; heck, some think that they have become divine! With so many things going so well for so long, we started to see the signs of hubris in product, and product announcements coming from Sun, all aimed not at keeping the company on top, but gravy-training* Java, and keeping Microsoft away. The most infamous of these failed initiatives was the Java Terminal, or Javinal, which, as its lack of success would soon reveal, rhymes with urinal. This led to:

A fixation on all things Microsoft. At this point in time, with the explosion of Java, and all the Java-based projects, and, of course, hubris, came an obsession with Microsoft. A real burning obsession. There were lots of consortia and coalitions formed to battle the MSFT threat, the most (in)famous of them being the NOISE (Novell, Oracle, IBM, Sun and Everyone else)coalition, which, unable to compete on their own merits, ran, tail between their collective legs, to the Justice Department's anti-trust division for relief. Unfortunately for McNealy, this preoccupation combined with hubris led to his taking his eye off the ball and running into the Internet meltdown juggernaut without both a clue and a strategy to cope, leading to:

The lack of Plan B. Every successful corporation should either have a strategy in place, or be developing on to combat the ills when fortunes change. By all indications, Sun did NOT, as reflected in the stock price dropping and staying there since the meltdown.

No Plan B! This from a Harvard business major.

Instead, homeboy kept on spewing forth meaningless platitudes for the past several years, ducking poignant questions about the unhealthiness of the stock known as SUNW. All the while forgetting that the sloganizing was no longer working.

What a shame as well. But for all three issues, he COULD have made a difference. Now he will be relegated to an anecdotal afterthought in history.

He won't be missed.

His story should serve as a warning to the incoming CEO, whose admirable intelligence and relative youth would serve him well.


* Gravy-Train: The art of hanging to the (often financial) coat tails of a successful person, or product.

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Copyright © 2006, John Obeto II for SmallBizVista.com®

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