Sun Microsystems under CEO Scott McNealy
In December 1997, a very wealthy client wanted to make a very large investment in Sun Microsystems. The client had been to one of Scott McNealy’s conferences and had been very much impressed by McNealy’s vision of the future of Sun Microsystems.
In December of 1997, I asked the Oracle about the future of Sun Microsystems under CEO Scott McNealy. The result was so negative that I did all in my power to make sure my clients stayed away from such a future mess. In the dot com bubble of the years 1999 and 2000 the price of Sun Microsystems reached over $80 and the Oracle seemed to have a made a mistake. Yet, by 2008, it was evident the Darkening of the Light had destroyed the corporation. In the end, the Oracle saved the clients millions in potential loses.
Points the investor should consider:
1) THE HEXAGRAM
HEXAGRAM 36 – Ming I – Darkening of the Light
Here the sun has sunk under the earth and is therefore darkened. The name of the hexagram means literally “wounding of the bright”; hence the individual lines contain frequent references to wounding. The situation is the exact opposite of that in the foregoing hexagram. In the latter a wise man at the head of affairs has able helpers, and in company with them makes progress; here a man of dark nature is in a position of authority and brings harm to the wise and able man.
Comments:
“wounding of the bright”;
Right away we can see that there is something wrong with a corporation where the able assistant is wounding the CEO.
THE JUDGMENT
DARKENING OF THE LIGHT.
In adversity
It furthers one to be persevering.
One must not unresistingly let himself be swept along by unfavorable circumstances, nor permit his steadfastness to be shaken. He can avoid this by maintaining his inner light, while remaining outwardly yielding and tractable. With this attitude he can overcome even the greatest adversities.
In some situations indeed a man must hide his light, in order to make his will prevail in spite of difficulties in his immediate environment. Perseverance must dwell in inmost consciousness and should not be discernible from without. Only thus is a man able to maintain his will in the face of difficulties.
2) THE ADVICE
THE IMAGE
The light has sunk into the earth: The image of DARKENING OF THE LIGHT.
Thus does the superior man live with the great mass:
He veils his light, yet still shines.
In a time of darkness it is essential to be cautious and reserved. One should not needlessly awaken overwhelming enmity by inconsiderate behavior. In such times one ought not to fall in with the practices of others; neither should one drag them censoriously into the light. In social intercourse one should not try to be all-knowing. One should let many things pass, without being duped.
Comments:
It becomes more and more obvious as we read more and more of the Hexagram that there is something deeply disturbing with Sun Microsystems and Scot McNealy.
3) THE LINES:
Nine in the third place means:
Darkening of the light during the hunt in the south.
Their great leader is captured.
One must not expect perseverance too soon.
It seems as if chance were at work. While the strong, loyal man is striving eagerly and in good faith to create order, he meets the ringleader of the disorder, as if by accident, and seizes him. Thus victory is achieved. But in abolishing abuses one must not be too hasty. This would turn out badly because the abuses have been in existence so long.
Comments:
It is evident that there must have been a power struggle within Sun Microsystems which eventually made it unstable.
Six at the top means:
Not light but darkness.
First he climbed up to heaven,
Then he plunged into the depths of the earth.
Here the climax of the darkening is reached. The dark power at first held so high a place that it could wound all who were on the side of good and of the light. But in the end it perishes of its own darkness, for evil must itself fall at the very moment when it has wholly overcome the good, and thus consumed the energy to which it owed its duration.
Comments:
Who would have thought that Scott McNealy, one of the founders and CEO of Sun Microsystems and considered one of the boys wonder in the world of management would drive his corporation into bankruptcy.
First he climbed up to heaven,- He was so highly regarded as a manager that Jack Welch, the famous CEO of General Electric, invited him to become a member of GE’s Board of Directors.
Then he plunged into the depths of the earth –When he resigned in 2006 after 22 years as CEO, everyone turned his back on him.
His was the classic example of having all the elements to become successful, becoming successful and then losing it all. This had nothing to do with talent. This was cyclical, this was a problem of synchronicity working against the CEO and the corporation.
Even today, Scott McNealy proved he was right when he said: “the Network is the Computer”. Now that everyone talks about having everything in the “Cloud”, is good to remember that McNealy was right about the future except that he was ahead of his time.
Maybe his biggest mistake was his eternal fight with Bill Gates where McNealy demanded that all software had to be free and Bill Gates obviously was of the opposite opinion. To McNealy, the important part was the hardware and not the software.
It is possible that now that Google is giving away the software for free in Google Docs in its Cloud, Microsoft will find itself under difficulties. However, McNealy was way ahead of his times and out of synchronicity.
4) THE MOVING HEXAGRAM
HEXAGRAM 27 – I – The Corners of the Mouth (Providing Nourishment)
This hexagram is a picture of an open mouth; above and below are the firm lines of the lips, and between them the opening. Starting with the mouth, through which we take food for nourishment, the thought leads to nourishment itself. Nourishment of oneself, specifically of the body, is represented in the three lower lines, while the three upper lines represent nourishment and care of others, in a higher, spiritual sense.
THE JUDGMENT
THE CORNERS OF THE MOUTH.
Perseverance brings good fortune.
Pay heed to the providing of nourishment
And to what a man seeks
To fill his own mouth with.
In bestowing care and nourishment, it is important that the right people should be taken care of and that we should attend to our own nourishment in the right way. If we wish to know what anyone is like, we have only to observe on whom he bestows his care and what sides of his own nature he cultivates and nourishes. Nature nourishes all creatures. The great man fosters and takes care of superior men, in order to take care of all men through them.
Mencius says about this:
If we wish to know whether anyone is superior or not, we need only observe what part of his being he regards as especially important. The body has superior and inferior, important and unimportant parts. We must not injure important parts for the sake of the unimportant, nor must we injure the superior parts for the sake of the inferior. He who cultivates the inferior parts of his nature is an inferior man. He who cultivates the superior parts of his nature is a superior man. 1
THE IMAGE
At the foot of the mountain, thunder: The image of PROVIDING NOURISHMENT.
Thus the superior man is careful of his words
And temperate in eating and drinking.
“God comes forth in the sign of the Arousing” 2: when in the spring the life forces stir again, all things come into being anew.
“He brings to perfection in the sign of Keeping Still”: thus in the early spring, when the seeds fall to earth, all things are made ready.
This is an image of providing nourishment through movement and tranquility. The superior man takes it as a pattern for the nourishment and cultivation of his character. Words are a movement going from within outward. Eating and drinking are movements from without inward. Both kinds of movement can be modified by tranquility. For tranquility keeps the words that come out of the mouth from exceeding proper measure, and keeps the food that goes into the mouth from exceeding its proper measure. Thus character is cultivated.
Comments:
It is quite a difficult thing to nourish oneself when one insists that all software must be free such as in the case of Sun’s Java, Sun’s Solaris and Sun’s Open Office. No doubt free software nourishes all humanity but Sun needed its own nourishment desperately.
Tell Larry Ellison to give away its software for free and see how fast you get fired.
Comments:
Scott McNealy resigned from Sun in 2006 after 22 years as CEO. He was replaced by Jonathan Schwartz who saw Sun reach line six and sink into the Darkening of the Light. Larry Ellison of Oracle bought Sun for $7.4 billion or $9.50 per share in 2009.
Sun’s stock had dropped dramatically from well over $100 to practically nothing. Such is the Power of the Darkening of the Light. It makes no sense to invest in a company which is facing the Darkening of the Light Time-Space. Few corporations can perform well under such Time-Space. It is best to continue to search for corporations with better Time-Spaces. After all, there are over 14 thousand corporations in the exchanges to choose from.
