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Global CIO: Oracle-Sun Biggest Challenge Isn't Technology—It's People

Jan 27, 2010 (08:01 AM EST)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=222600115


Saying that Oracle "is getting a crown jewel of the technology industry" and "will do great things with Sun," Sun founder and chairman Scott McNealy's farewell memo assured Sun employees that Larry Ellison "will do well with the assets that Sun brings to Oracle." It's a moving, passionate, candid, and funny memo—classic McNealy.

It's interesting to compare McNealy's message (it went out to employees last night and is posted in full below) with Sun CEO Jonathan Schwartz's farewell memo to Sun employees, which came out a few days ago and was the subject of our recent post called Sun CEO's Farewell: Sun Is A Brand, Oracle's Your Company.

While the two executives both lavish Sun's people with praise for their great work and passion, each man takes a very different approach to how Sun employees should handle the transition from Sun to Oracle—and the parallel viewpoints illustrate the enormous challenge of successfully blending and even assimilating cultures in a merger.

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Here are the marching orders from the fiery McNealy's memo from below: "Do your best to support them, and keep the Sun spirit alive and well in the industry. Our children will be better for it."

(Thanks and credit to Cnet's Stephen Shankland for posting a copy of McNealy's memo as part of a thoughtful blog post from Shankland.)

Good stuff, no doubt. But note how McNealy refers to Oracle as "them," underscoring the us-them thing that acquisitions need to quickly and actively eliminate. He also urges—quite understandably, from his perspective—his colleagues to "keep the Sun spirit alive and well in the industry." Not the Oracle spirit, but the Sun spirit. But I think it's both fair and accurate to assume that McNealy meant not so much the corporate "Sun" identity as he did the innovation, passion, integrity, and generosity that he highlighted throughout the memo.

CEO Schwart's memo, on the other hand, explicitly directs Sun employees to drop the "Sun" thing and eagerly embrace the future as members of the Oracle team. Schwartz creates quite an image for how Sun employees should do that:

"And the most effective mechanism I've seen for driving that commitment begins with a simple, but emotionally difficult step," wrote Schwartz. "Upon change in control, every employee needs to emotionally resign from Sun. Go home, light a candle, and let go of the expectations and assumptions that defined Sun as a workplace. Honor and remember them, but let them go."

Interesting contrast, isn't it? And while surely the most important objective for those Sun-into-Oracle employees will be creating superb products and services, that brain-driven outcome can't be disconnected from their hearts. Are they Sun employees trapped inside a big and voracious outsider named Oracle, or are they part of the new generation of Oracle innovators hell-bent on changing the world, just as McNealy's memo chronicles?

On the other side, Oracle's executives realize they have created an extraordinarily big opportunity for themselves:




Partly because of the endless melodrama around receiving acquisition approval from the EU, this deal has generated a stupendous amount of publicity for Oracle and for Larry Ellison's vision of what The New Oracle, pumped up by Sun's technology and passion, can become.

Indeed, that's a primary driver behind Ellison's whole strategy, as spelled out in our recent column called Global CIO: Oracle CEO Larry Ellison's Top 10 Reasons For Buying Sun.

Ellison has explicitly said he values Sun's technology enormously—he said it's been "a national treasure for decades"—and last night he explicitly endorsed the high regard in which he holds Sun's people when he told the Wall Street Journal Oracle would be adding 2,000 sales and engineering employees to fully exploit Sun's products and technologies, and that those 2,000 new employees would exceed the number of Sun employees who'll be fired as redundant.

From that WSJ article:

Mr. Ellison said his planned 2,000 new hires will outnumber the cuts Oracle is making in Sun's head count, which stood at 27,596 as of Sept. 30. Oracle, which had 83,366 employees at the end of November, was widely expected to slash Sun's work force.

"We are not cutting Sun to profitability," Mr. Ellison said. "We think that this business will be profitable immediately."

So it would appear that Ellison and Oracle are extremely eager to get the vast majority of Sun's approximately 27,000 employees on board and driving the company's new high-end systems strategy. That, combined with the passionate exhortations from McNealy and Schwartz for Sun's employees to continue doing great things within the Oracle framework, lays the groundwork for overcoming the most-challenging part of the acquisition: creating a vibrant, unified, and open culture in which every employee's best work can be delivered.

If Oracle and Oracle/Sun can get that right--and if Sun's people can find the right combination of taking their passion forward while embracing the new Oracle entity--then the technology stuff will be easy.

Now here's McNealy's memo (and thanks again to Cnet's Stephen Shankland):




Subject: Thanks for a great 28 years Date: Tue, 26 Jan 2010 From: Scott McNealy To: [all Sun employees] Gang,

When I interviewed many of you for employment at Sun over the years, one commitment often made was that things will change above, below, and around you faster than any place you have ever been. Looks like this was one area we exceeded plan for 28 years. While it was never the primary vision to be acquired by Oracle, it was always an interesting option. And this huge event is upon us now. Let's all embrace it with all of the enthusiasm and class and talent that we have to offer.

This combination has the potential to put Sun, its people, and its technology at the center of yet another industry and game-changing inflection point. The opportunity is well-documented and articulated by Larry and the Oracle folks. Not much I can add on this score. This is a very powerful merger. And way better than some of the alternatives we were facing.

So what do I say to all of you, now this is happening?

It turns out that one simple message to the large and diverse Sun community is actually quite hard to craft. Even for a big mouth who is always ready with a clever quip. The community includes our resellers and customers, our current and former employees, their friends and families who supported our employees on their mission to change the industry, our investors, our supply and service partners, students and educators, and even our competitors with whom we often collaborated.

But let me try. Though nothing I could write comes close to matching the unbelievably strong and positive emotions I have for you all. See, I never was able to master dispassion. I truly loved starting, running, and living Sun. And the last four years have not been without serious withdrawal. And the EU approval rocked me more than it should have.

So, to be honest, this is not a note this founder wants to write. Sun, in my mind, should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.

And I sure "hope" America regains its love affair with capitalism. And except for the auto industry, financial industry, health care, and some other places (I digress), the invisible hand is doing its thing quite efficiently. So I am more than willing to accept this outcome.

And my hat is off to one of the greatest capitalists I have ever met, Larry Ellison. He will do well with the assets that Sun brings to Oracle.

What we did right and wrong at Sun over the years might make for interesting reading. However, I am not a book writer. I am a husband, father of four, and a builder and leader of people who want to make a difference.

But spare me a bit of nostalgia. Not of the mistakes we made, and lord knows I made a ton. But of the things we did right and well.

First and foremost, Sun innovated like crazy. We took it to the limit (see Eagles). And though we did not monetize our inventions as well as we could have, few companies have the track record in R&D that we had over the last 28 years. This made working at Sun really cool. Thanks to all of you inventors and risk takers who changed how we live.

Sun cared about its customers. Even more than we cared about our own company at times. We looked at our customer's mission as more important than ours. Maybe we should have asked for more revenue in return, but our employees were always ready to help first. I love this about Sun, which I guess makes me a good capitalist, if not a great capitalist.

Sun did not cheat, lie, or break the rule of law or decency. While we enjoyed breaking the rules of conventional wisdom and archaic business practice, and for sure loved to win in the market, we did so with a solid reputation for integrity. Nearly three decades of competing without a notable incident of our folks going off course morally or legally. Not all executives and big companies are bad. Really. There are good companies out there. Special thanks to all of my employees for this. I never had to hide the newspaper in shame from my children.

Sun was a financial success. We paid billions in taxes, salaries, purchases, leases, training, and even lawyers and accountants for devastatingly cumbersome SOX and legal compliance (oops, more classic digression). Long-term and smart investors made billions in SUNW. And our customers generated revenue and savings using our equipment in countless ways. Many employees started families, bought homes, and put them through school while working at Sun. Our revenues over 28 years exceeded $200B. Few companies make it to the F200. We did. Nice.

Sun employees had way more fun than any other company. By far. From our dress code ("You must!") to beer busts to our April Fools' pranks to SunRise to our quiet enjoyment at night of a long, hard, well-done day of work, no company enjoyed "work" more than Sun. Thanks to all of our employees past and present for making Sun such a blast.

I could go on for a long time reminiscing about the good and great stuff we did at Sun, but just allow me one last one. We shared. Not the greatest attribute for a capitalist. But one I could not change and was not willing to change about Sun while I was in charge. We shared in the success of Sun with our resellers. With our employees through stock options, SunShare, beer busts, and the like (for as long as Congress would allow) and through our efforts to keep as many of them on board for as long as possible during the inevitable down cycles. With our partners through the Java Community Process, through our open-source collaborations, and licensing strategies. With our customers through our commitments to low barriers to exit. Sun was never just about us. It was about we. And that may be a bit of the reason we are where we are today.

But I have few regrets (see Sinatra's "My Way") and will always look back at Sun and its gang with only pride. Enormous pride. You are the best this industry ever had, though few outside of Sun recognized it.

And what we are about will live on in Sparc, Solaris, Java, our products, and our spirit. Well past everyone's recollections of what we did together. I will never forget, though.

Oracle is getting a crown jewel of the technology industry. They will do great things with Sun. Do your best to support them, and keep the Sun spirit alive and well in the industry. Our children will be better for it.

Thanks for the off-the-charts support to everyone who ever carried a Sun badge, used our products, or helped our company through the years.

And thanks to my wonderful wife, Susan, who gave this desperado (see Eagles) a chance to choose the Queen of Hearts before it was too late.

Someday, hopefully, you will all get to see or meet her and my other life's works named Maverick, Dakota, Colt, and Scout. If you do, perhaps you will understand why I stepped back from the CEO role four years ago. And why I feel like the luckiest guy in the whole world.

My best to all of you, and remember: Kick butt and have fun!

Scott

RECOMMENDED READING:

Global CIO: Oracle CEO Larry Ellison On The Future Of IT

Global CIO: Oracle-Sun A Bad Deal? Only A Fool Would Say That

Oracle Sees Unconditional EU Approval For Sun

Global CIO: Why Oracle's Larry Ellison Will Tell The EU To Pound Sand

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

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