Looking for a Suitor
Schwartz realized early on that Sun wasn't going to continue to stay in business using its old formula, so, in 2007, he started looking for a suitor. This rankled McNealy, who later proposed taking Sun private, but the idea didn't fly with the board of directors. By April 2009, Schwartz and the board had IBM set up as the buyer. All the due diligence was completed, but at the last hour, "IBM overplayed its hand," and the deal was off, Schwartz said.
Other sources said that some personal "golden parachutes" (lucrative guarantees to certain Sun executives to leave the company) got out of hand, so IBM pulled out for that reason.
Since the takeover, Oracle has been battling to turn the Sun hardware business into a profitable one-something Sun hadn't been able to do in more than a decade. Oracle's 2012 second-quarter fiscal report revealed that the hardware business was down 14 percent over a year ago, so the struggle continues. "I think Oracle's now finding out how tough that business is," Schwartz said. The continuing difficulties Oracle has encountered with Sun reinforce that point and suggest it was fundamentally weaker than the company's most vocal proponents ever imagined, analyst King said. "Schwartz seems to have recognized those flaws and tried to deliver Sun to a suitor with the assets and incentive to get the company back on track," he added. "Whether Oracle will ever accomplish that is unclear." Schwartz learned a lot while in Sun's executive chair. He grasped the importance of online communications (via blogging), social media tools like Twitter and leveraging the Web to improve corporate transparency years before other senior executives did. Those attributes make Picture of Health and Schwartz well-worth watching, King said. Though Schwartz said he couldn't yet provide details on Picture of Health, he did say that focusing on health has been a "personal choice" for both him and CTO and co-founder Walter Smith, a former Microsoft executive. "Health care is a deeply personal thing; it's tough to say the same about servers and specialized microprocessors," Schwartz said. "Mums, Dads, children, friends, loved ones, nurses, doctors, even insurance companies and governments-everyone cares about health and well-being."