Johnathan Schwartz is my favourite CEO. If computer industry CEOs were available as trading cards, I’d have Schwartz, Steve Jobs and maybe Mark Shuttleworth and stop my collection there.
What makes Schwartz such a good CEO is that he is a nerd. Business schools like to push the line that a “good” manager (where “good” is defined as “alumnus of our school”) can manage and lead any company in any industry. Essentially the argument is that management transcends technology, regulation and the like: that business is a spotlessly abstract activity that can be performed anywhere.
What rubbish. I don’t dispute that business and management are disciplines unto themselves, but it’s a bit rich to pretend that any Harvard graduate can waltz in and run a successful firm in an industry they know nothing about.
This is especially true in IT. This industry is driven by the development of new technologies, including a lot of pure research that never gets out of the lab. This costs a lot of money — you need to hire expensive brainiacs — that may or may not show an ROI next quarter.
To many B-school graduates, this seems to be utterly nuts. Why fund something that’s essentially a gamble? Especially if you don’t know what you’re funding. For all you know, those sneaky nerds are ripping you off and playing Doom all day. Best to outsource all your R&D expenses by shutting it down and relying on Microsoft and Intel to do it all for you.
Which is essentially the model that the IT industry adopted in the mid to late 90s. Instead of focusing on the core R&D effort to leapfrog competitors, some companies essentially gave up on it. Carly Fiorina did this to Compaq and Hewlett-Packard and killed off some of the most advanced technology ever devised (especially the famous Alpha family of CPUs).
Johnathan Schwartz, being a bit of a nerd, understands what the R&D is heading to. It also helps that his undergraduate degree is in economics. When he discusses Sun’s upcoming R&D results he usually frames it in terms of economic trends. His latest entry is a case in point. He talks about the relative cost of storage technologies. Traditionally this has been in dollars per gigabyte. But the rising tide of data means that purchase cost is becoming dominated by the price of the electricity to run datacentres — the trendline of dollars per gigabyte maintained is crossing with the dollars per gigabyte purchased.
What makes Schwartz a great CEO is that he sees both sides of the coin: the changing economics of the field and where his company’s portfolio of technologies fit into it. A lot of CEOs see the economic side, but very few understand their portfolio of technology. Even fewer post blogs. And as far as I know, Schwartz is the first CEO in history to link to source code in a blog entry talking about his company’s technology.