Tech Update: OK. You and Steve Ballmer traded barbs about working out your differences. Sun says United CIO Eric Dean invited Microsoft to the Liberty Alliance. You personally invited Ballmer down to Sun to work out a deal. Ballmer says Microsoft wasn't invited to the Liberty Alliance and he would be happy to do a deal if Sun agrees to stop all litigation once and for all.

McNealy: (Laughs) So, I will work with you as long as I can do whatever I want to you and never... I mean is this the most ridiculous comment you have ever heard? I will work with you if you promise that all laws are forever suspended with respect to our relationship. So I can go and breach a contract. I can kill all your employees and I can poison all of your food sources. As long as you don't litigate against me for any of that, I will be happy to work with you. Would you ever... I mean is that the most ridiculous comment you have ever heard in the world? I want to be above the law. I think it's fantastic. It blew me away when he said that at the Gartner Conference and the Gartner folks didn't even bother to call him on that. You mean to tell me you will work with a company only if you don't have to play by the rule of law? You know what? At some point he's becomes so powerful or so successful or so rich or whatever, he doesn't even get challenged on these unbelievable statements. I mean I can just see me walking into any customer, competitor, or partner, or supplier, or whatever, and saying, "I will buy from you as long you promise never to sue me for anything I do, no matter what, no matter how illegal, no matter how unethical, no matter how immoral." People don't walk into partnerships or relationships like that.

Tech Update: The guy who built my house said, "I'll let you buy a house from me, but you have to agree not to sue me if something goes wrong. And if we do have a disagreement, then we go to arbitration."

McNealy: That's different.

Tech Update: Would you be open to saying, "Look, all right, we won't sue you, but we have to go to arbitration."

McNealy: That's effectively what a judge is.

Tech Update: But it's less...

McNealy: Less what? I mean the judge was the arbitrator. When we went and said "You're in breach of our Java contract, the judge said yes you are."

Tech Update: Maybe less public, less a matter of public record.

McNealy: I don't mind. I mean I don't care.

Tech Update: You would do that?

McNealy: Why use an arbitrator when I have the court system to go do that. I have not had to go sue any other Java licensee. And not one of them was in breach. They have all agreed. This is not a Sun litigation. And by the way, we're not the only ones that have sued Microsoft.

Tech Update: Is there a chance that all this emphasis on Microsoft runs the risk of distracting you from three other entities that are perceived as threats to Sun: Intel, IBM, and Linux.

McNealy: First of all, I don't consider Linux a threat to Sun. They're Unix. They're a partner. They're a supplier, if you will, to Sun. We have Linux extensions to Solaris. We're the number one Linux server appliance manufacturer with our Cobalt Product Line. We run StarOffice on Linux. We run Java and Jini on Linux. We run the iPlanet stuff on Linux. And the Linux world steals from Unix and the Unix world steals from Linux. It is very compatible. And applications written to Linux run on Solaris and Solaris applications run on Linux very easily. It's a very compatible. When Linux wins, the Unix world wins. When the Unix world wins, Sun wins. That's a good thing. Intel and Microsoft--Wintel--Wintel is a competitor, and IBM is a competitor. It's Wintel, IBM, and Sun. So it's .NET, which is what Intel is all about. Intel is not the competitor. Intel just drafts behind the Microsoft monopoly. They don't innovate. They don't lead. All they do is draft behind the .NET binaries and, you know, we're on our third going on our fourth-generation 64-bit architecture, and they still haven't gotten Itanic to work. So that's not the competition. It's a Microsoft-led Intel competition, not an Intel-led Microsoft competition. So those are the three competitors, and yes, we're focused on it. IBM doesn't focus on architecture. They focus on Global Services. They lead with people not product.

Read part II

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