Tech Update: Some hardware market observers say that they see Sun having trouble using SPARC as a key differentiator towards t

he end of the decade.

McNealy: That's what they said last decade. Isn't that exactly what they said last decade? Is that not what they have always been saying all along? We're on our third decade where they said SPARC ain't going to make it.

Tech Update: Well, it's pretty much going to be a three-horse race by the end of the decade. It's going to be SPARC, IPF (Intel Processor Family), and Power. So IPF is now the strategic hardware platform for all of your former RISC-based competitors, except for one, IBM. IBM's pockets are deep enough to get firmly behind both Power and IA-64 and they can go the distance. Do you really think that SPARC will continue to strategically generate the sort of a competitive advantage over IPF that warrants the investment of limited funds that could be otherwise used to wage higher priority battles against the more important competitor with limitless finances?

McNealy: We match all the other 64-bit architectures combined. We hold every LAN speed record in the world. What would our product line be if we were on Intel right now? It would be two- and four-way 32-bit servers that are commodity. Intel's 64-bit architecture may be shipping, but I have to go by what I read and what I see in the market. From what I can tell, they are not in volume. What I hear is that Itanic is the pre-production development platform waiting for the McKinley platform as their first real 64-bit production environment.

(Editor's note: According to an Intel spokesperson, "Itanium chips are being produced in large quantities." The shipping status of systems based on that chip, however, is a different question. IBM spokesperson Lisa Lanspery says the company is currently shipping its Itanium-based eServer x380 and Intellistation Z Pro. Dell spokesperson Bruce Anderson claims that Dell's Itanium-based PowerEdge 7150 server is available. Compaq is tuning its ROM BIOS to solve a problem it discovered with its DL590 server and expects to ship that system "very shortly" according to a spokesperson for the company. Hewlett-Packard's Web site reports that its Itanium-based i2000 workstations, rx4610 servers, and rx9610 servers are on "limited availability" status. Intel and system manufacturers frequently tout McKinley as the Intel 64-bit processor that will demonstrate the scalability of IA-64. McKinley and its companion chipsets are due sometime in the second half of 2002.)

Tech Update: Yes, but do you think there will still be a sufficient gap by the end of the decade?

McNealy: The gap is continuing to widen. It started widening in 1988 or '89 when we started shipping SPARC and it's been widening ever since. We do 108-way scalability. We do two- and four- and go into eight-way clustering. We had R-A-S (reliability-availability-serviceability) features like you read about that Intel doesn't even like to think about putting into their product today. It's 64-bit. They're still 32 bit. I don't even understand the question. The gap is widening. In the one- to two-way space, we just launched this new 880 server product that goes--what is it? It goes up to 8-way? It blows the doors off of the Wintel machines at the low end, just blows the doors off of them. Every time we launch a new low-end server, everybody goes, "Oh, they're going after the Intel marketplace." We've been gaining share in that space. The low-end server market is the fastest growing segment of our server business because of the huge, huge market opportunity provided by the Wintel servers at the low end. It's a fantastic business for us. And I don't understand the question. Who can do what we do for anywhere from under $1,000 up to 15 million dollars, all binary compatible. There is no other architecture in the world that can do that. All 64-bit, all with the R-A-S features and performance that we have with all the applications there. Name one application that doesn't run on SPARC across the board from under $1,000 to $15 million.

Tech Update: IBM and Intel are building a 13.6 teraflop grid of IA-64 base systems running Linux that will support scientific research. If it works it will be a huge feather in the cap for Itanium and Linux. Sun has the Sun Grid Engine that several organizations are working with as well. With scalability and availability looming as strategic priorities, what do grids mean for the future of computing and the future of Sun?

McNealy: Sun has always focused on horizontal as well as vertical scaling, and there are different applications and different environments that need horizontal scaling and different ones that need vertical scaling. There have also been different places that need a teraflop versus transactions. There are other places that need data warehousing as opposed to transactions. There are always different axes that you need to follow and invest in, and Sun is making good solid bets in peer-to-peer, in grid computing, in vertical and horizontal and virtualization, and really doing memory managing from the SmartCard all the way back to the level-one cache on the UltraSPARC III chip and everything in between. So it's a very broad environment. I don't know many spaces where Sun doesn't have a very, very solid presence.

What we've been able to do is do all of these architectures with the same basic binary SPARC, Solaris, Java, Jini, Jxta kind of architecture. The SunONE architecture. We don't have to do AS/400 here, an MVS there, RS/6000 here do that, or Regretta (Editor's note: reference to IBM's p690 Regatta server), as they renamed it. I know we don't have to do OS/2 over here and Wintel there, then Lintel there, and then something else for the card. We have a common architecture, a common API, a common security strategy, common installation, common upgrade, common software installation, a common architecture across the whole thing. The money we save our customers--this is why TCO is on our front page. The TCO story is off-the-charts huge. Being able to do all of these things without having to relearn and having 20 products across the board. So we don't break your API by doing a grid engine because it runs on SPARC and Solaris.

Tech Update: So, do you see in the future a whole cluster of WebTone switches working together?

McNealy: Everything is going to scale in all directions.

Tech Update: If I was IBM President Sam Palmisano and I wanted to deliver the worst possible blow to Sun as a competitor, I would target J2EE by announcing .NET support in all of my operating systems, especially AIX and Linux. So how does Sun respond to another major Unix player--IBM or otherwise--announcing support for .NET on the server side?

McNealy: You can't do .NET unless you do Windows. .NET is Windows only. And you will never find any .NET server or .NET client that isn't Windows. That just will never happen, so for them to adopt .NET, that means they have to shoot their Unix business. They have to become a Windows business. The question says "What if IBM were to drop everything and just do the HP/Compaq strategy and just become a Wintel reseller and drop their own Unix server business?" If they did that, I say fantastic. Then we don't have to compete against IBM.

Tech Update: You've talked about the national ID and why it's so important. You've talked about how we put chips in dogs, why don't we put them in our kids and things like that. If you could structure a national ID system, how would it work?

McNealy: Well, I think we have to have the ability to--as accurately and as full-proof as possible--be able to ID people when we need to ID them.

Tech Update: So how do we do that? What's the system?

McNealy: I haven't really thought through the best way, but maybe you have some certified identification issuers, ID issuers that issue ID cards that meet some government standard for authentication, minimally authenticatible like biometric retina scans or fingerprints or whatever, and then we choose a way of making sure we have a better way to authenticate people. That is so different. And everybody gets all bent out of shape when they hear me talk about an ID card. The fact that I can authenticate who you are doesn't mean that I build a database on who you are. Nobody is worried about being identified. People are worried about databases. That's their big worry is they don't want the government building a database on you or me or them. I guess they fear their government, but maybe that's a reasonable fear. So have a law that says everybody needs to have an ID card that can authenticate them when they need to be authenticated. For instance, you make a bunch of laws that say "Here's where you need to authenticate who you are. When you vote, you ought to have to authenticate yourself." Doesn't that seem reasonable? Does that seem unreasonable?

Tech Update: No. There are plenty of instances where you should have to authenticate yourself.

McNealy: Maybe when you get on an airplane, we want to decide that you have to authenticate yourself. Now, American Airlines keeps the database of where you traveled and when, and they don't share it with the government. So there's no government database, there's just an American Airlines database on where you traveled and when, and they had authenticated you accurately. Maybe you're not allowed to go rent a crop duster unless you authenticate yourself. Now the crop dusting company is the only one that keeps the database. Now maybe there are some things that you do where you have to be checked against the 22 Most Wanted list. So after you authenticate yourself, before you get the crop duster keys, maybe the crop dusting company has to check that ID with against the 22 Most Wanted database. Now maybe the government decides that they have evidence that says you're a suspected terrorist and they go to the court system like they do to get a wiretap, and they say, "We want to go check this guy out. We want to go build a database on this person." And the court says, "We agree. Go build a database." Then they go, and they go to everybody who has potentially IDed this person. So they go to American Airlines, United, Airlines, Hertz. They go to Visa, they go to everywhere and build a database on this ID and then use that to see if you really are a terrorist.

Tech Update: Is there one ID from one issuer or should we carry multiple IDs from multiple issuers?

McNealy: I think you ought to have at least one that's a national ID. So when the government says if you're going to fly an airplane or if you're going to rent a crop duster, you need to show a national ID, because you want to have an ID card that you have some sort of way of ensuring that it's accurate. If somebody cracks the code, you can redo the encryption on the SmartChip or if you come up with a new way of doing biometrics that's even better, we can transition to that or whatever. But that doesn't stop American Airlines from creating ID cards that says if you can identify yourself and authenticate yourself, you can go through this line. If you don't want to show any ID cards, you've got to go through a different line. Or maybe United Airlines says you don't need to identify yourself but American Airlines says you do need to. Which airline do you want to fly?

So it's a very complicated subject. Everybody gives me the one-liner quote, "You have no privacy." Get over it. Everybody ought to have a chip behind their ear. It doesn't get into the complexities. But I find very few people that will sit down and have a reasonable conversation with me and separate authentication from database. Just because I have a national ID doesn't mean the police are allowed to pull me over and ask me who I am. They've got to have a reason. They've got to have a reason today. Right now I just show them an ID card that's easy to fake.

Tech Update: So, what was your most recent book that you read? What do you think our readers should read?

McNealy: You know, I spend all my time reading trade magazines like...

Tech Update: ZDNet?

McNealy: Yeah, I do. And you guys come to me. Somehow I get like three e-mails a day from you guys. And literally I get most of my information now online. It's just a pain in the butt to carry it around any more. And it seems to be better edited for me. I don't read fiction. I don't have time. If I have time off, I go hit golf balls or play with my kids rather than read somebody's fantasy world. I haven't read Harry Potter.

Tech Update: What keeps you up at night?

McNealy: Besides my boys? Well obviously, you know, I think it's unfortunate that the DOJ has decided not to enforce the law, especially after every judge in every court has looked at it. It's interesting when the prosecutor is wimping out. I mean that just usually doesn't happen. But I'm way too patriotic to think that our administration can be bought off with a few donations. There's got to be some other good reason. I can't think of what that is. That keeps me up at night. The economy keeps me up at night. I just heard in the newspaper today, they are now admitting it's a recession. I don't know who "they" are, but I wonder what rock have they been under. I worry a lot about how unbelievably disconnected the folks in Washington on Capitol Hill in the administration are from what's really going on. Jack Welch (Editor's note: Jack Welch recently retired as CEO of General Electric.) and I have been using the "R" word for a year now, and I just read about it? I mean why don't they ask the folks who know? Right? So, I worry that there's a lot more people coming off payrolls and coming off with severance packages who are going to stop buying, and you know, I worry about a consumer recession that we have so far been able to mostly avoid. But that's probably my second biggest worry after, you know, anarchy with respect to antitrust laws.

Tech Update: I guess the government is losing touch across the board. Antitrust laws, recession, economy ...

McNealy: Well, in fact I think the terrorist attacks have really defocused the government. Everybody says it's focusing everyone. It focuses on something they had to go do, but we've defocused on all kinds of domestic issues and it's going to catch up to us.