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Bye Ed – Analysts pull the chain on Sun chief
To the Nob Hill Ritz Carlton Hotel, why not?
Why? Well, Merrill Lynch is hosting a financial analyst conference here all week, deliciously titled "Hardware Heaven". No, it really is called that. We don't know what it means - but we're obliged to pass on the information, anyway.
This is the very same Merrill Lynch that was disgraced by New York's state attorney recently for its part in hyping dot.com tech stocks that it really thought were terrible investments all along. It dumped stock while it was telling the public to go grab some more. Now, Merrill Lynch has promised to mend its ways, to put up Chinese Walls, or Portuguese partitions, or Formosan four-by-twos, or something, between its analyst division and its investment division. So the corruption isn't repeated. Of course we all believe that it really won't ever happen again, right?
And just to prove that Merrill Lynch isn't anyone's patsy, it's decided to bare its fangs. Grrr! It's going to be really mean to technology companies. It's going to give them a really hard time. As of now. You watch.
And specifically, it's going to give Sun Microsystems a hard time. Why Merrill Lynch picked on Sun is anyone's guess. We figure Sun makes for a good symbolic target because it's done more or less the right thing for so long, and has consistently made money. Or at least, when Sun hasn't made money, it hasn't lost much either: which bucks the boom-bust thesis not a little. But if the company had matched its marketing swagger, it could easily have blown it, many times over. For example, Sun could have poured billions into vainglorious attempts to conquer markets such as embedded chips: but it made the calculations and decided it couldn't afford it. Check out MIPS and Motorola's financials, and see who made the right choice. Sun's secret is that it's actually much more dull than it would have you believe. It's a middle aged renegade. Borr-ring.
However the knives were out tonight, and this made for a particularly torrid evening for Sun's chief operating officer Ed Zander, who spoke at a dinner Sun had sponsored in an attempt to mollify the brat pack.
The evening started badly, and got steadily worse.
"Whaddaya, mean, we're the next SGI?" said Zander in response to a caustic introduction from a Lynch druid.
"Heh. I've put something in his food. You wait 'til he goes to the bathroom!" replied Ed.
Zander had prepared a self-deprecating presentation, which - and we précis this loosely - amounts to "we're all fucked". What he actually said was, "it's tough to sell stuff out there, and even tougher to make money." And he had figures to back it up - Sun was flat, but the competition was stiffing. Which is actually true.
Zander ran through presentations acknowledging weak areas - storage and iPlanet branding - and focused on Sun's big reorganization of its field sales. When he finished, the trouble began.
"When are you quitting?" was the first question.
"Your contract's up in June, are you following others out of the organization?" was the second.
"Hey, I don't know what Scott's been saying - but any more questions about my life and I'm outta here," said Zander, after an excruciating five minutes, that seemed like hours to us.
This was Ed on the ropes, and we were beginning to feel sorry for him. What we mean is, this is a fellow renowned amongst the press corps for his obnoxiousness, a chap with a charisma rating roughly on a par with Steve Ballmer, who frequently castigates hacks for asking stupid questions. And then doesn't answer them: arrogance which Microsoft execs could never dare do.
That's partly, no mostly, why we love him. If you’d fielded asinine questions from CNET grunts for ten years, you'd be kind bored by now, too. In fact, we were beginning to feel that he was being hard done by. For Zander's the kind of grifter, the kind of field-focussed organizational nut you need to keep things going in a recession. He wasn't being appreciated here, and he didn't appreciate not being appreciated.
Especially not by a bunch of milksopped MBAs who'd never sold so much as a pencil between them. (We're going by Ed's body language, here - bear with us).
Zander slipped through a back curtain, and the analysts turned to weightier matters.
"You know, it's all about commoditization, and Dell started all that," one analyst told us.
"Yeah. You look at memory prices."
We promised we would.
"And Itanium's going to change everything. Don't you think?"
We made our excuses, grabbed a coffee, and fled.
Capitalism is in safe hands.
Everything's going to be great. Don't worry. Whatever you do - don't worry. ®