The Hot New Computer Team Of Sun & Oracle - Part II
(See Part I here: Message 6851946 )
SUSIE GHARIB: The stocks of Sun Microsystems and Oracle were both down today despite news that they're joining forces to market a version of Oracle's database system that will run on computers using Sun's Solaris operating system. Those machines, not surprisingly, will not need Microsoft's operating system. Sun has been on a tear this year. Its stock has skyrocketed more than 90 percent. And as Scott Gurvey reports, Sun was the catalyst behind America Online's decision to buy Netscape (NASDAQ:NSCP).
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The headlines read, "America Online Buys Netscape." But it was the participation of Sun Microsystems that really brought the two together. AOL wanted Netscape's state-of-the-art browser technology. It also wanted Netscape's Net Center Internet site, a portal viewed by nine million pairs of eyeballs. But in buying Netscape, AOL would also pick up that company's enterprise software, the stuff companies use to operate their Internet sites. And selling that type of product is not something the leading consumer online service has much experience doing. It is exactly what Sun Microsystems' 7,000 strong sales force is experienced at doing, selling businesses the hardware to run their networks and the software to make that hardware work. When AOL came calling, Sun immediately saw the light.
WILLIAM RADUCHEL, CHIEF STRATEGY OFFICER, SUN MICROSYSTEMS: I think we went into this understanding a couple of things. Your best partners are not ones with whom you have lots of overlapping economic interests. Your best partners are ones who have complementary economic interests because you don't spend all your time fighting with each other about dividing the pie. You focus, instead, naturally on making the pie bigger. And so, we identified early on that-or that Scott did three years ago -- that AOL could be a really great partner for Sun.
GURVEY: What Sun's Scott McNealy did three years ago was to call AOL's Steve Case. That began a relationship that was the key to this deal.
SCOTT McNEALY, CEO, SUN MICROSYSTEMS: The original idea wasn't nearly this exciting. I just wanted to go sell the largest Internet service provider some servers. And we, you know, we run the Internet with our service. So I just started three years ago, four years ago, calling them and saying, can we sell you servers? And he said, well, you know, let's think about that. And all of a sudden, he came to us with the idea and said, hey, how about if we work-you know, we're really interested in Netscape and the Net Center idea-and we get your partnership on the product side because they aren't as good as products as we are.
GURVEY: Once that call came, Sun had to move fast. Some detractors criticize Sun's informal management style. But the company's management team says that is exactly what enabled it to take quick advantage of the opportunity.
EDWARD ZANDER, COO, SUN MICROSYSTEMS: We had to move quickly and respond quickly and I think it was an interesting process to watch inside this company of how people from areas that didn't even know each other came together and slept in conference rooms and got this thing done.
GURVEY: Now the company must move to modify its business plan. With AOL, Sun gets a good customer which has promised to buy a $1/2 billion worth of servers. It also gets Netscape's software to add to its sales portfolio. But most importantly, it gets access to millions of consumers, potential users of its Java programming and potential buyers of the Java-based appliance products it hopes to develop in the years ahead.
MICHAEL LEHMAN, CFO, SUN MICROSYSTEMS: Product life cycles are so short and so our entire business model has to be very flexible, very quick in terms of the ability to react.
GURVEY: Tomorrow, we'll profile Sun's chief speed demon, CEO Scott McNealy. Scott Gurvey,
NIGHTLY BUSINESS REPORT, New York.
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(c)1998 Community Television Foundation of South Florida, Inc.
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