Sun's McNealy: Don't restrict foreign technologists

Sun CEO defends immigrants, outsourcing at event with company founders

MOUNTAIN VIEW, Calif. -- Sun CEO and Chairman Scott McNealy on Wednesday evening condemned efforts to restrict foreign technologists from coming to Silicon Valley, arguing that the practice only deprives companies of brain power.

McNealy and the other three Sun co-founders, Andy Bechtolsheim, Bill Joy, and Vinod Khosla, reunited onstage at a Computer History Museum   event. They waxed on about Sun's beginnings in 1982 and commented on where they believe the technology industry is headed. One audience member, making a comparison to the Beatles, even referred to Sun's founders as the "computing Fab Four."

The evening's sharpest comments were McNealy's protests against restrictions on bringing immigrants to American technology vendors. He noted that Bechtolsheim and Khosla are immigrants, as is Sun's Java guru James Gosling.

"We are just torturing ourselves by not letting all of the really smart people come to the valley," McNealy said. Khosla, McNealy added, has "hardly been a burden on our society," given the substantial taxes he has paid.

He also defended outsourcing and denied that if someone gains a job overseas, it means someone in the United States loses a job. "It just isn't true," he said. Technologists need to focus on innovation to improve opportunities, he argued.

McNealy also stressed the importance of getting everyone worldwide onto the Internet, which he referred to simply as "the network." Technology use in developing countries boosts the plight of peoples around the world, lessening the ignorance that breeds problems such as terrorism, he said.

"I think it's just going to be a safer and better world if we can get that done," McNealy said.

One audience member questioned whether Sun, whose fortunes have lessened since the dot-com bust early in the decade, could become a footnote in the computer industry like Silicon Graphics. But McNealy defended Sun's vitality, saying the company has $4.5 billion in the bank and has had 17 consecutive years of positive cash flow. The company is a major player in microprocessors with Sparc and operating systems with Solaris, he added.

Customers still will need servers and Sun is developing grid technology, he said. Sun also has its Java software to increase opportunities, McNealy said. He also touted Sun's record of innovation. "We have a patent portfolio that's off the charts," McNealy said.

McNealy is the only co-founder who has been with the company uninterrupted since 1982. Khosla left in 1985 to become a venture capitalist while Joy left in 2003, also for the venture capital industry. Bechtolsheim departed Sun in 1995 but rejoined the company in 2004, when Sun acquired Kealia, which also was founded by Bechtolsheim. He serves as Sun's chief architect and senior vice president in the company's Network Systems Group.

The nearly two-and-half-hour session, which attracted about 300 persons, featured various musings from the four founders and John Gage, who served as moderator for the event and is chief researcher and director of the Science Office at Sun. The founders noted Sun's humble beginnings as a startup seeking venture capital so it could sell Bechtolsheim's economical workstations running Joy's Berkeley Unix software. This was an unconventional combination at the time.

"You are never completely without doubt," when starting a venture such as Sun, Khosla said. "Those of you who are thinking about [forming a startup], you've got to just jump in and do it," he said.

Sun's early systems replaced DEC machines that also ran Joy's Berkeley Unix software, Bechtolsheim said. "What [customers] were going to get with the Sun machine was exactly the same software at one-tenth the price of the hardware," said Bechtolsheim. 

Pondering how much opportunity there is in the computing industry today, Joy said there has been an increase. "There's more opportunity now than before because there's more disciplines in which there is the same kind of opportunity," Joy said.

But Joy does expect the industry to have difficulties in continuing to boost performance in hardware. "We're getting down to places where metals don't scale," Joy said. Technologists could migrate to a different technology, he added. Khosla was more optimistic, saying he did not believe in limits.

In other highlights:

-- Joy noted that Sun had tried to buy Apple Computer and also attempted to partner with it on many occasions, but to no avail. "We were very close to having Apple use Sparc and that didn’t happen," said Joy, noting Apple's new use of Intel chips.

-- Discussing patents, McNealy characterized the company's $92 million patent settlement in 2004 with Eastman Kodak as merely a high-interest loan. As Kodak involves itself in digital processing technology, it is sure to need Sun's intellectual property, he said. McNealy did not cite Kodak by name, but referred to it as a film company.

-- McNealy, asked by an audience member why he did not use his iPod very much, responded that tending to his four young sons did not leave him much spare time to use the device. McNealy also said iPods would be displaced by improved cell phones in five to seven years. 

-- Sun's Rock supercomputing technology, now in development, was noted by McNealy.

-- It was noted that nearly 200,000 employees have worked for Sun, with Bechtolsheim holding the designation as the company's first employee. The number most recently was 198,897 employees in and out of the company since 1982, according to Gage.

-- Khosla touted his current venture in bio-fuels as a potential replacement for petroleum. Hydrogen-based energy is not the answer, according to Khosla.

Copyright © 2006 IDG Communications, Inc.