CEOs: See how they run (their companies)

The keynotes at the Gartner Symposium ITxpo in Lake Buena Vista, Fla. weren't particularly revealing, but you get a sense of how the leadership of each company influences the culture of the company, and how it deals with adversity.

HP CEO Carly Fiorina, still somewhat bruised from her lengthy proxy fight to acquire Compaq, came out swinging. She is the most polished of presenters and rarely gets off key or message, even when she is dinging competitors.
In response to Dell entering the printer business, Fiorina called Dell a distribution channel not a printer provider. Dell recently inked a deal to private-label Lexmark printers. "I think it's interesting that Dell announces a strategy and everyone assumes they will be successful," Fiorina said. "They made an announcement to be a channel of distribution for someone else's product. It's an interesting strategy, but not a way to produce real profitability."
Fiorina pointed to the $900 million HP will spend to develop its next generation printer consumables as a key differentiator. When asked about Dell selling ink jet cartridges, the most profitable part of HP's business, for far lower cost than HP's current model, Fiorina did not express any concern that company profit could erode.
"HP has consistently demonstrated our ability to meet every competitive threat for imaging and printing business over multiple years. We are in a better position today than we have ever been in the history of the company."
It is true that HP has been able to maintain leadership with a variety of competitors over the years. And, the company has even done well recently in the under $100 market, competing against Lexmark, Canon and others. But the big hurt could come if Dell and other competitors start a price war on ink jet consumables, which apparently cost about $2 to $3 to manufacture, and sell for upwards of $20.
It seems like there is a lot of margin to play with, and that's what Dell can do well via its huge channel that crosses consumers and enterprise businesses. At a time when profits are hard to come by, HP is exposed to taking a hit in its consumables business, despite Fiorina's confidence that the company can vanquish the newcomer Dell.
Fiorina also dinged Sun and EMC, saying that the two companies don't have the capital to invest in the R&D necessary to be competitive in key markets, such as microprocessors and storage management.
Perhaps when she is through digesting Compaq, Sun or EMC will be in her sights. Sun would bring HP immediate ownership of the high-end Unix market and Java, which would put them back in the middleware game, but would not be looked upon favorably by its current partners, especially Microsoft. EMC would add to HP's portfolio of high value hardware and fit with the company's focus on storage management software.
When asked to grade the company on its integration progress so far, she said: "Candidly, compared to what many people expected, I would give us a 'B+' or an 'A-' for sure."
She definitely deserves an "A" for her performance on the stage at Gartner. Whether she deserves a high grade for integration will be up to customers to decide.
'Stewards of Moore's Law'
Intel CEO Craig Barrett did not need to spend time fielding questions about competitive threats, but was called upon to address the fate of Moore's Law. He said that that Moore's Law is good for another 15 to 20 years. "We see ourselves as the stewards of Moore's Law," Barrett said. That will be true as long as Intel keeps pumping $500 million per month into pushing the technology.
The company is looking at new technologies, including new kinds of switches such as nanotubes, but the manufacturing and construction techniques will not be much different.
"The issue is recognizing that technology changes and positioning yourself to take advantage of it," Barrett said.
Barrett also discussed his view of the economy and what he thought would move the needle in a positive direction. He attributed much of the downturn to the synchronous occurrence of over-investment in telecommunications equipment, the dot com meltdown, a faltering worldwide economy and the Y2K overhang, meaning the massive upgrading that went on prior to the year 2000.
As you might expect, Barrett looks at all the 500 MHz computers sitting on laps and desks as a huge opportunity. He's right: It is time for a big upgrade cycle. Who wouldn't want 2 GHz or 3 GHz to play with? But it will take more than wishful thinking to catalyze spending.
Barrett also had sage advice for IT buyers: "The main challenge is to make a judicious selection of the salad of technology that is out there." The first step is figuring out what kind of salad you want to make.
'Earnings are an opinion, cash is fact'
Sun CEO Scott McNealy was his usual pithy and irreverent self. He was asked about the viability of his company and immediately brought up the $5 to $6 billion in cash Sun has stored up, mostly from taking advantage of the dotcom bubble.
"The real issue is cash is king," said McNealy. "Earnings are an opinion, cash is fact."
He said that Sun has gained share, and continues to dominate the Unix marketplace, according to the latest Gartner Dataquest numbers. "We may not be outrunning the bears, but we are certainly outrunning the other hikers," McNealy said.
When asked about being acquired, McNealy said, "If you think you can run this sucker, have at it. We have a $9B market cap and you will have to pay for that with cash because I don't care who you are, I don't want your stock. The companies that can afford to buy us would have antitrust issues. The rest of the companies can't afford to buy us."
Maybe Dell would like to take a run at Sun. Probably not, given that Michael Dell likes to keep his business simple and to enter maturing markets without having to spend a lot of R&D dollars on proprietary technologies.
McNealy boiled down the company's strategy into simple terms: "We are desperately focused on providing the best webtone infrastructure." Webtone in McNealy's parlance is dial tone for an environment in which everything is connected to the Internet. Manageability and security issues aside, Sun has always been ahead of the pack with its vision.
The use of the word "desperately" is perhaps telling. And, he barely talked about Java, which is a core strategy for the company.
Asked if he would still be running the company in a year, McNealy replied, "I sure hope so. I am fairly healthy." My guess is that he will be around unless desperation turns to despair.