Rival CEOs at Sun Microsystems and Microsoft Make Peace
By RACHEL KONRAD
SAN FRANCISCO (AP) — You had to see it to believe it: there were Scott McNealy of Sun Microsystems Inc. (SUNW) and his Microsoft Corp. (MSFT) counterpart Steve Ballmer, slapping backs and exchanging collector hockey jerseys after years of acerbic rancor between the two companies.
Sitting side by side in directors chairs at a posh hotel, the chief executives reminisced about undergraduate years at Harvard, where the Michigan natives drank Stroh’s beer and shared a love for the Red Wings and Motown tunes.
“We’ve been pretty good friends for a long time,” McNealy said, “though we’ve had some rocky moments.”
Rocky moments? More like nearly two decades of antagonism and sarcasm.
In 2001, Ballmer lambasted one of McNealy’s pet computing projects, the Liberty Alliance, as having “zero possibility of mattering in the world.”
McNealy, who often spoke of “Ballmer and Butthead,” once said Bozo the Clown could manage Microsoft better than Bill Gates & Co.
McNealy and Ballmer attended rival high schools in Detroit’s tony suburbs; their fathers worked at rival automakers. They grew up with what some believe was a inflated competitive streak – possibly putting ego before logic – and appeared to relish trash-talking the other at conferences and to the media.
But McNealy and Ballmer said Friday they would forgive their past insults to please customers, particularly large corporations, which have complained that Sun and Microsoft products haven’t exactly worked well together.
The two men slapped backs and pumped hands like war veterans as a phalanx of photographers fired away. On stage, they both sat with hands clasped between their legs, careful to burst into laughter when the other made a joke.
Still, business experts say the $1.6 billion deal – which encourages compatibility between Microsoft and Sun’s operating systems and hardware – could get scuttled by executive hubris. Few tech observers believe the CEOs are capable of fully sheathing their verbal swords.
“These guys aren’t going to just quiet down,” said Roger Kay, vice president of technology research firm IDC. “They’re like the dinosaurs – whenever a bigger, meaner dinosaur established himself, the others didn’t just go out of business. They all just kept getting bigger, until the whole species went extinct.”
Many Silicon Valley figures – including Larry Ellison of Oracle Corp., and former Netscape Communications Inc. executives Marc Andreessen and James Barksdale – have trashed Redmond, Wash.-based Microsoft.
But few have proven more obsessive – or entertaining – than McNealy, who’s compared Gates to Darth Vader, a Stalinist dictator and the leader of the “evil empire.”
McNealy frequently used geeky shorthand and faux slips of the tongue as barbs: Microsoft’s Windows CE operating system was “Wince.” Microsoft Active Directory, which records data on corporate networks, was “Captive Directory.” Microsoft’s .Net development strategy was “Dot Not,” and after delays “Not Yet.”
But McNealy toned down his “Microsoft vs. mankind” rhetoric last June, when he called Ballmer about potential collaboration.
“I just said, ‘Hey, Steve, why don’t we get together, play golf – pick and date and let’s do it,’” McNealy said Friday.
Business experts credited McNealy for reaching out to his teenage pal, whom he remained friends with at Stanford University’s business school. But they warned that the executives don’t have much time for making up; the growth of Linux and other open source technology is eroding market share of both companies.
If they can put aside personalities, the deal could soften Microsoft’s image. It could also boost Sun’s market share, said Jeffrey Alan Sonnenfeld, associate dean of the Yale School of Management.
“Their egos had them both trapped in a game of chicken,” said Sonnenfeld, a friend of both men and fellow Harvard ’76 grad. “But each one of them was hitting walls in recent weeks, getting a sense of their own mortality. Frankly they’re not wunderkinds and enfants terribles anymore – they needed to recognize they’ve got a shared fate.”
Could this mark the beginning of a kinder, gentler tech industry?
“Companies in our industry are relatively young and have acted in an adolescent fashion. Maybe now there’s a maturing going on that comes with perspective,” said Lee Patch, Sun’s vice president of legal affairs. “But I hope this doesn’t take all the fun out of it.”
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