CNBC- MARKET WRAP - SUN MICROSYSTEMS (SUNW) CHAIRMAN AND CEO SCOTT MCNEALY ON THE COMPANY'S ANALYST MEETING
FEBRUARY 5, 2001
SUMMARY: McNealy discusses the company's new Web-based software, code-named Brazil. He says the business is slowing down, but the long-term market is strong. He comments on the revenue and the stock price of SUNW.
Tyler: In the next hour, Sun Microsystems will unveil its new Web services game plan and will it give the company the boost it needs? The stock as you can see by this six-month chart is down nearly 50%. In his only television interview prior to the rollout is Sun's chairman and CEO, Scott McNealy. Mr. McNealy joins us live from the Palace Hotel in San Francisco, where the event is taking placing. Good to see you.
Nice to see you.
Tyler: All right. You have a meeting for analysts getting underway. I want to get to Web services thing in a minute, but a meeting for analysts getting under way. What you do plan to tell them about the general state of your business?
Well, we plan to talk to them about the strategies and long-term product directions and philosophies of the company as opposed to the short-term direction of the markets and the business, that sort of thing.
Tyler: Part of that long-term strategy is obviously the unveiling of this Web-based software, as the code name is Brazil. What does it do and how quickly do you think that it will start adding to revenues?
Well, it is adding to revenues today. We are talking about a lot of products that are shipping new releases of the key components and a lot of new technologies in capabilities including some of the stuff on Web top. This is all contributing to our revenue today and future enhancements. What this technology is going to allow you to have is smart Web services. So you can go to your service provider or your commerce company whatever and have devices and services be smart, work together, so that you can go shopping and in your car, it will tell you, pull over here you've got some laundry at the dry cleaners ready to pick up. You need gas, I have done an auction on the network. I have found cheapest place for you get gas. All of this stuff will happen without you having to go on the Internet Smart Web services, Sun One Web services will do that for you.
Tyler: With all due respect, I probably know I have got drying cleaning at the dry cleaners, don't I?
You might not know that it is ready.
Tyler: I mean how useful is it, come on.
You might not know that it is ready now. You might not remember you are near it. You might not know that you have time before your next calendar event. All of these services can then work together to go make that happen. In a supply chain environment, all of this can work together, so that you know automatically order parts when you are low, or parts when you get a new big order in. So, it is not just for, you know, any specific example or when you are say the airport closes in Chicago and changes your travel plans. You've got to cancel reservations at the hotel, cancel reservations at the car agency. So, there is lots of things that Smart Services can help you with.
Tyler: Topic A in the information technology area has been business slowdown. Is your business slowing down? How is demand?
Well, I think our business is slowing down. We have been growing at 60 and 44% the last couple of quarters. And I don't know any 20 billion dollar sized company that continues to grow at that rate. But, we still see a very strong long-term market. We think we are in the biggest equipment business in the history of anything and we are clearly gaining shares.
Tyler: Why hasn't the stock performed better lately?
Well, I'm a 19-year shareholder and it has performed fabulously. I was talking to my wife and we got married about six years ago and the stock has gone from like one to 29 or 30 since we got married. So she is a pretty happy shareholder and I think the folks in a couple years ago are pretty excited.
Tyler: They sure are. It has been up tenfold over the past five years or thereabouts, but in the past six months, it lost 50% of its value, despite tremendous corporate performance. What is Wall Street not understanding?
You have to ask Wall Street. I'm plugging away as a mid- Western CEO type trying to do the best we can.
Tyler: You hit the ball pretty well at the AT&T didn't you? You added the most strokes or helped your partner the most yesterday, I'm told.
We had a pretty good day, but don't tell the shareholders that. They will not think I'm working hard enough.
Tyler: One of the best golfers among all CEOs. Thanks for joining us. Our thanks to Scott McNealy, chairman and CEO of Sun Microsystems from San Fransisco.
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Jack |
