I went to a Sun Microsystems presentation for Wall Street analyst types this morning. I don’t often attend such events, and one could argue that, having already written one blog post about the company this year, I have dramatically overcovered it relative to the rest of corporate America. But they invited me, I didn’t have anything else on my schedule this morning, and I was curious.
What did I learn? First, that I had forgotten to bring a pen. About halfway through the show I finally did find, in an outside pocket of my backpack, a little golf pencil I’d gotten from a guy selling programs at the Oakland A’s game I went to a few weeks ago. But the whole presentation is online, so I guess word-for-word reporting was kinda pointless anyway. I can, however, report on three important themes.
1) Frugality. The meeting took place in a crummy, not-very-big conference room in Sun’s Manhattan office. It was uncomfortably packed and warm. The breakfast spread was far from lavish, and the only artificial sweetener provided with the coffee was Sweet’N Low–always a dead giveaway that somebody’s trying to avoid spending money. Or trying to avoid wasting money, as you might say if you were a Sun shareholder.
2) The Ponytail. Sun’s Jonathan Schwartz has got to be the only CEO in the Fortune 500 (Sun is No. 187 on this year’s list) with a ponytail (please tell me if you know of any others). I’d previously thought it an affectation, but having now seen it in action, I think it works. When Schwartz looks at you straight on, and the ponytail is invisible, he comes across as a babyfaced but unnervingly intense bean counter. Then he turns his head and shows the tail and you suddenly relax: He’s, like, a pony-tailed blogger dude! It’s a bad cop, good cop routine, all in one simple flick of the head.
3) Realism. I attended a few analyst meetings and listened to a lot of earnings conference calls, mostly for tech companies, back in the late 1990s and haven’t much since. In those days, the overriding impression one got was of a big-time snow job: Earnings would grow forever, competitors would fall by the wayside, the stock market was only beginning to understand the company’s limitless potential. The Sun guys gave off an entirely different vibe. They were expecting revenue growth of 3-5% a year, and if that happened they thought they could deliver modest improvements in earnings margins, but they weren’t promising anything more than that. “We’re working on building a sustainable business that will be around for the next 25 years,” said CFO Mike Lehman (after I found that pencil).
I left before the Q&A was over–there’s only so much talk of Solaris and ZFS and Thumper that a guy like me can take. But I took away a mostly positive impression: Here was a company whose top executives talked realistically and thoughtfully about the long-term. American corporate capitalism was righting itself after years of excess. Or something like that.
Then, in the elevator, I started talking to an analyst who had also left early. He fumed about the shoddiness and pointlessness of the meeting, which he said reflected a perennial administrative and marketing ineptitude at Sun that contrasted sadly with the company’s R&D brilliance. He said nobody on Wall Street cared about Sun’s desire to survive for another 25 years, and that the only way the company would be able to get its stock price to rise would be to sell itself off, preferably to IBM.
I don’t know if that analyst was right. I do know that I wouldn’t survive a day on Wall Street.