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McNealy, Scott - Overview, Personal Life, Career Details, Chronology: Scott McNealy, Social and Economic Impact

sun business computer java

(1954-)
Sun Microsystems, Inc.

Overview

Scott McNealy is the energetic chief executive officer (CEO) of Sun Microsystems and a champion of alternative computer technology. He specializes in network computers (NCs) as opposed to personal computers (PCs) and hopes that his own Java software will succeed in breaking the near-monopoly of the Windows operating system.

Personal Life

Scott McNealy was born on November 13, 1954, to Marmalee Doris (Noffke) and Raymond McNealy. He grew up in the Detroit suburb of Bloomfield Hills with his two brothers and a sister, while his father worked as an executive for American Motors Corporation (AMC) and then the Chrysler Corporation. His father, who rose to become the vice-chairman of AMC, often engaged his teenage son in discussions about business. He even took him golfing with Chrysler chairman Lee Iacocca.

Although McNealy has an impressive educational background, he was not a model student. After attending Cranbrook Kingswood, a private preparatory school where he served as captain of the tennis team, he earned a degree in economics from Harvard University in 1976. But his initial applications to the graduate business schools at both Harvard and Stanford were met with rejection. Finally, McNealy was admitted to Stanford on his third try. A manufacturing major, he received his Master’s in Business Administration (MBA) in 1980 and helped found Sun Microsystems a mere two years later.

Known as brash, fun-loving, and extremely energetic, McNealy enjoys creating catch phrases to explain his business philosophy (“have lunch or be lunch”) and strategies (“the network is the computer”). His motto, “kick butt and have fun,” sums up his general approach to work. In fact, humor is an important part of Sun’s corporate culture; for example, elaborate April Fool’s day pranks have become a tradition, with company engineers targeting McNealy and other executives.

McNealy and his wife, Susan, married in 1994 and have a son named Maverick who was born in 1995. Even though he could easily afford more expensive fare (his personal income was estimated at around $1.2 million in 1994), he says that his favorite meal is a double cheese pizza with Bud Light beer. His hobbies include playing golf and hockey.

Career Details

While awaiting acceptance to graduate school, McNealy took a job as a foreman and plant scheduler for Rockwell International at a plastics facility in Ashtabula, Ohio, that produced truck hoods for the company’s automotive operations. Anticipating a labor strike, Rockwell officials ordered its employees to work double shifts in order to maintain production. McNealy contracted hepatitis two months into the accelerated schedule and was hospitalized for six weeks. In the meantime, he was admitted to Stanford, prompting him to quit his job and head for California.

McNealy’s first job after receiving his MBA was at a tank manufacturing facility owned by FMC Corp of Chicago, Illinois. However, he resigned from his position 10 months later. As he later told a reporter for Fortune magazine, “FMC put me on a strategy team, and I wanted to be a plant manager. I wanted to make something.”

In 1981, McNealy was hired as the director of manufacturing for Onyx Systems, a minicomputer company based in San Jose, California. Assigned to improve quality control, he achieved this goal by meeting with employees, talking over the problems they faced, and encouraging them to solve them on their own. Yet he was not quite satisfied with the way his career was unfolding. While his passion for manufacturing had not waned, his commitment to the demands of corporate life was not as strong. In fact, as he once revealed in Industry Week, McNealy dreamed of owning a small machine shop. “If it all worked out,” he went on to explain, “I figured my kids would run it someday and I’d get out when I was 45 or 50 years old and play golf.”

McNealy’s plans underwent a sudden and dramatic change, however, when a former Stanford classmate and engineer named Vinod Khosla invited him to become involved in a new computer company he planned to establish. (The other two partners in the endeavor were product designer Andreas V. Bechtolsheim, also a Stanford graduate, and programmer William N. Joy, a former student at the University of California in Berkeley.) The creation of Sun Microsystems, Inc., in 1982 would soon catapult McNealy into the ranks of an elite group Forbes magazine later dubbed “high tech’s new royalty.”

Although he knew very little about computers, McNealy accepted his friend’s offer and went to work as Sun Microsystem’s head of manufacturing. He proved to be highly skilled at his new job, enabling the company to meet the explosive demand for its products that caused sales to grow from $9 million in 1983 to $39 million in 1984.

Soon McNealy was also running the sales department and actively seeking funds to help the operation expand. In 1984, Eastman Kodak Co. agreed to invest $20 million in the company if McNealy were made president. Around the same time, Khosla left Sun and McNealy was named president on a temporary basis. Within a few months, the company’s fortunes took off and McNealy, at the age of 30, was named Sun’s CEO.

Although he had often vowed never to fall victim to the expectations that had claimed so much of his father’s time, McNealy quickly found himself working 80-hour weeks. “I’ll never know my kids as well as most people…,” he remarked to a Business Week reporter. “But I’ve also got 15,000 people and $7 billion worth of market value counting on me.” As if to underscore his love for his job, he added, “I just wish I didn’t have to sleep.”

Under McNealy’s leadership, Sun has made its name manufacturing computer workstations of the type traditionally favored by sophisticated users such as engineers and scientists. When such computers are linked by a network, their resources are multiplied geometrically, making them more powerful than individual PCs or terminals served by a mainframe computer. McNealy’s commitment to network computing really paid off during the 1990s as major business clients turned to the format in increasing numbers. Among the firms Sun supplied with networks for their internal operations were Federal Express, the Gap, AT&T, Universal Card Services, and Charles Schwab.

Network computing has proven to be an important Internet tool as well; in 1996, for example, some 35 percent of World Wide Web servers were Sun machines. (Servers are the machines on which companies tend to install all of the software that run their business.) They have proven to be more reliable, versatile, and powerful than those run by software developed by Sun’s competitors, chiefly Microsoft.

In addition, Sun has created two other important products that cater to the needs of Internet users and large businesses. The first and most revolutionary one was Java, a computer language that enables all networked computers to communicate with each other and share applications, regardless of which operating systems they may be using. Unveiled in 1995, Java created quite a stir in the computer industry as enthusiastic programmers contemplated being able to write software that can flow from machine to machine along a network. Furthermore, Sun engineers demonstrated that Java miniprograms (or “applets,” as they are called) could jazz up web pages by making it possible to add motion to words and images. Java thus has the potential to generate revenues for Sun in several ways—as a licensed language, as the language used in Sun-authored programs, and as its own operating system.

Sun was also one of the first computer companies to offer a network computer (NC), a disk-less machine especially made for working on the Internet. With an NC, the user’s files and applications are stored at a remote location that is accessible via the Internet. However, some critics were less than impressed when NC’s were introduced in late 1996. They speculated that such machines were not likely to appeal to the average consumer.

Chronology: Scott McNealy

1954: Born.

1976: Received degree in economics from Harvard.

1980: Received MBA from Stanford.

1982: Cofounded Sun Microsystems, Inc.

1984: Became president of Sun Microsystems, Inc.

1984: Became CEO of Sun Microsystems, Inc.

1995: Unveiled Java computer language.

McNealy is understandably among those who are excited about Sun’s future prospects. Others express a hint of caution, noting that even though Bill Gates and Microsoft lag behind Sun in the world of networked computers, it would be dangerous to downplay the threat they pose. “We’re not going to make any money on Java, but that’s all right,” McNealy admitted in OEM Magazine. “We’ll make money selling servers and desktops and network-management software. We just want the world to be free from having to write to Windows.” Indeed, Sun’s sales rose to over $762 million by the end of 1997, apparently disproving the naysayers—at least for the moment.

Social and Economic Impact

With both Java and the NC, McNealy is making a concerted effort to challenge the near-monopoly of the Windows operating system and its maker, Microsoft. He is determined not to become one of Window’s many vendors; instead, Sun computers run a customized version of the Unix operating system. As McNealy commented in Forbes, “What we’ve decided not to do is become a general purpose car dealer, selling Fords, Chevys and Toyotas We like the fact that we own our intellectual property; we own our microprocessors and our operating system.” The overwhelming popularity of Windows makes this a risky proposition, but McNealy said in Business Week that he wants his company to be “controversial.” “If everybody believes in your strategy,” he declared, “you have zero chance of profit.”

A bona fide workaholic, McNealy has little time or inclination to pursue anything but business. “[He] makes no pretense of being an intellectual or a visionary,” Brent Schlender observed in Fortune. “He can’t remember the last time he read a book, much less a novel, and he loves to ridicule highfalutin notions about what computers can do for humanity.” Nevertheless, Schlender concluded, “He has forced Microsoft to rethink basic aspects of its business and play a little catch-up.” For that alone, he stands out in an industry that has seen its share of big names (among them IBM, Apple, and Netscape) take on Bill Gates and Microsoft and lose, sometimes in a very big way. It is a fate that McNealy has no intention of sharing.

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