Sunlight on a Cloudy Day…

I did an interview last evening with John Markoff, of pretexting fame, at the Churchill Club (a Silicon Valley community gathering). I’ll point to the links as soon as they’re up – I tried to hijack the interview to reverse roles, so I could interview John on what it was like to be snooped on (his response, “it wasn’t the first time”).

We talked about a variety of topics – from leadership and politics, to the changing open source landscape. On the latter, from where I sit, we’re seeing an increasing schism in the market, separating those that protect their customers at the expense of the open source community, from those that protect the community while leaving customers vulnerable. Our view is you have to respect both, and that we’ve effectively threaded the needle with both OpenSolaris and OpenSPARC, and Sun’s commercial derivatives of both – and that those best practices will guide our approach going forward. If you want proof, stay tuned for next week’s announcements. (It won’t be a boring week.)

John and I also spent some time talking about corporate transparency and shareholder communities (I’d just presented, that morning, to a group of Sun shareholders at Sun’s Annual Shareholder meeting, links and audiocast here (and yes, to the commenter who suggested we need to refresh our file formats for technology neutrality, you’re quite right, stay tuned).

As I’ve said before, transparency and efficiency are obligations as much as opportunities – a better informed investor can make better decisions, just like a better informed customer or developer.


Filed under General

22 responses to “Sunlight on a Cloudy Day…

  1. Chris Cox

    I mailed the response to your letter yesterday, but since you’re talking about transparency and efficiency in communications, I thought you might appreciate my taking advantage of the Internet’s speed and potential for broad dissemination by posting here as well.
    Chris Cox

    November 2, 2006
    Mr. Jonathan Schwartz
    Chief Executive Officer
    Sun Microsystems, Inc.
    Mailstop UMPK10-244
    10 Network Circle
    Menlo Park, CA 94025
    Dear Mr. Schwartz:
    Thank you for your September 25, 2006 letter. In your letter, you suggest that, in light of the evolution of the Internet, the Commission should state that certain types of corporate website postings, including electronic mail alerts, would satisfy the broad non-exclusionary dissemination conditions of Regulation FD.
    As you are aware, I believe strongly that the Internet is a powerful tool that can be used effectively by corporations and all market participants to provide information to the market and investors. The Internet can empower investors to obtain and evaluate information about companies, and its potential has not yet been fully exploited. Today, many companies maintain websites on which they post their annual and periodic reports, press releases and other information of interest to investors, customers and other persons. The Commission has recognized the importance of corporate websites and the Internet in providing important corporate information and developments to the market, both in connection with capital raising and disclosing ongoing corporate developments. Since Regulation FD was adopted in 2000, significant advances in information and telecommunications technology have occurred that have dramatically increased Internet use by businesses, consumers, investors, and government agencies. These advances have transformed the Internet into a primary means for the rapid dissemination and retrieval of information. Technology now plays an integral role in timely informing the markets and investors about important corporate information and developments.
    You are certainly correct that a corporate website is a tremendous vehicle for the broad delivery of timely information (and in the case of Sun, you note that your website receives an average of nearly one million hits per day). Many other companies are finding that this is true, and increasingly are posting significant amounts of information on their websites. Indeed, because information that is not “selectively disclosed” or that is not material nonpublic information is not subject to the public dissemination provisions of Regulation FD, Sun and other public companies can already do this without implicating the provisions of Regulation FD.
    The Commission encourages the use of websites as a source of information to the market and investors, and we welcome your offer to further discuss with us your views in this area. Assuming that the Commission were to embrace your suggestion that the “widespread dissemination” requirement of Regulation FD can be satisfied through web disclosure, among the questions that would need to be addressed is whether there exist effective means to guarantee that a corporation uses its website in ways that assure broad non-exclusionary access, and the extent to which a determination that particular methods are effective in that regard depends on the particular facts.
    I appreciate your thoughts and support for the many actions the Commission has taken to recognize the expanded role the Internet plays and will play under our interactive data initiative, among others, to better inform investors and the market about important corporate developments. Your offer of continued assistance as the Commission continues to work to tap the power of technology to enhance investor access to information is most welcome.
    Christopher Cox Chairman

  2. Lee Hepler

    Response to Mr. Cox:
    “among the questions that would need to be addressed is whether there exist effective means to guarantee that a corporation uses its website in ways that assure broad non-exclusionary access, and the extent to which a determination that particular methods are effective in that regard depends on the particular facts.”
    1. No corporate web site shall require the use of a closed proprietary we browser (i.e. IE) to view its FD information. The information should be accessible by any standard browser on any standard OS.
    2. Data files shall be available in an open, non- proprietary, royalty free format. Any such files should be able to be viewed, processed and analyzed by both widely available free and commercial software products.
    3. The sections of corporate web sites containing FD data shall be accessible without login or other access requirements to insure that the FD data is available to the broadest audience. The FD section of the web site shall also be available to be indexed by search engines such as Google, Yahoo, etc.
    Thoughts beyond a response to Mr. Cox:
    Data files and communication protocols are to the 21st century what railroad tracks were to the 19th century. We should stop allowing the patent and subsequent control and licensing of both data formats and communication protocols to enable free and open commerce and competition. It is time to stop allowing these impediments to open competition. We were able to finally get all the railroad tracks the same gage which unleashed the industrial revolution. We must do something similar for computing. Not necessarily make them all the same but make the data files, packets, APIs, protocols open and non- proprietary. This will fully unleash this new age of information and participation for the good and enrichment of all. Of course M$ and some other large corporations will fight tooth and nail to keep their royalty kingdoms. Just like what happened with the railroads.

  3. I just recognized that you have your blog translated to several other languages. Now I also saw that I didn’t notice your hint in one of your posts some weeks ago. That post is closed for comments now so I give you my feedback here off-topic.

    Probably a separate post in all of your 10 blogs about your blog being available in 10 languages would be a good idea.

  4. The Internet is completely changing the very definition of transparency. Ubiquitous connectivity is helping to reduce information asymmetry, which in turn influences how companies do business and how customers react to that.

  5. 394 words into this non-response, Chairman Cox says it will need to be determined if effective means exist “to guarantee that a corporation uses its website in ways that assure broad non-exclusionary access.” Of course those means exist – we don’t need an expensive, taxpayer-funded blue ribbon panel to figure that out. Just as the original law made very clear what communication channels constitute fair disclosure, an update could make equally clear how corporations will be required to maintain open access to all material information.

  6. Nguyen Thu Hang

    Dear Mr. Schwartz,
    I’m Hang, I’m form Hanoi, Vietnam. I’m 23 years old. Last year, I graduated the national ekonomics university in Hanoi. Now I’m living and study in Czech republic(I’m studing about technologie). Beside I want star my business career, But I always feel that, I missing alot of skills of the business. I always embarrassed and don’t know where and how star.
    I always have alot of ideals, but it always is ideal. I can’t turn it into the trust as I thinks. So after that i feel very terrible, and haven’t confidence in myself.
    You are the famous business man. You have alot of experiences about the begining and the business, So would you have give me some expert for my begining?

  7. Hang,
    You might consider visiting Sun Tech Days which will be held in the Prague next week, 14-16th November (details are here). I can’t think of a better place to start.
    I hope to see you there,


  8. Jonathan, I just read about Project Blackbox and I have to ask: what’s to keep someone else from just copying this idea? Is it covered by patents? I ask, because I just don’t see commodity hardware — which is what a container is — saving Sun. What’s to prevent someone else from doing the exact same thing but with open source and Dell blades (or something even cheaper)?
    What’s up with the math question?

  9. “Assuming that the Commission were to embrace your suggestion that the “widespread dissemination” requirement of Regulation FD can be satisfied through web disclosure, among the questions that would need to be addressed is whether there exist effective means to guarantee that a corporation uses its website in ways that assure broad non-exclusionary access, and the extent to which a determination that particular methods are effective in that regard depends on the particular facts.”
    Let’s hope those new plain English executive compensation disclosures are clearer than this. :-0

  10. Aside to John Moran (previous commenter): of course Mr. Cox’s letter is a not responsive! Did you you expect that he was going to reply “Sure, sounds great! Go for it!”? It is a very positive response and suggests that he is very open to the idea if the details can be worked out and even invites Jonathan to engage with him to work it out. Reading the original post, I know that I immediately thought, “How do you guarantee that anybody will see it in a timely manner?” I think that Lee Hepler’s comment goes along way toward the requirements, but I would also require an RSS or ATOM feed, just so that everyone interested would be informed that there was data available.

  11. David

    I think Mr. Cox is subtly saying that: 1. Corporate websites have a way of being difficult to navigate and they are always changing their sites. 2. Probably, corporate websites will eventually charge a subscription fee. 3. Which blog on a corporate website will get the financial data…one specific blog or hundreds of blogs? 4. At what time and which day would this financial data be reported? 5. Email alerts and blogs sound exclusionary especially if it happens when the markets are open and at an unspecified time. 6. And this has great potential for corporate malfeasance. (ie. CFO blogs that the company is not going to get any drugs approved by the FDA and then right after he blogs, he sells his stock.)

  12. Kevin Hutchinson

    I believe that you recently said “Obviously I can’t talk about our partnership with Google.” How come? Since the toolbar-with-Java announcement, we investors have heard nothing. Please may we have some transparency? I’d love to hear some good news!

  13. Zsejki

    “If you want proof, stay tuned for next week’s announcements. (It won’t be a boring week.)”
    I hope this will be Open Source Java’s week…

  14. Ernesto

    I wish the Jonathan’s news for this week won’t be about a partnership with Microsoft too. 😛

  15. I agree to everything you said. Thumbs up.

  16. There is a hole in the x64 market for servers with 2-8 sockets (which can accomodate dual/quad cores), like Sun Fire 4600, and upto 12 SAS/SATA drives from a Tier 1 vendor. Any plans to address this gap?
    2-4 (or 5) hard drives are insufficient for certain tasks, and having to buy external storage with HBA is sometimes too cumbersome.

  17. Congratulations to both Jonathan Schwartz and Chris Cox…it’s astounding to read on a blog dialogue between a public company CEO and the Chairman of the SEC…
    It’s fantastic…keep it up gentlemen…the American investor really benefits…
    Transparent and efficient markets and free flowing information.
    I’m lovin’ it…

  18. Michael

    An RSS and/or Atom feed would be a good way to go, I agree. However, it may also be a good idea to standardize an XML format for financial reporting, something that can be easily parsed by third party programs to provide analysis without having to be translated and entered manually into a system. I can see financial feed readers being as popular among investors as news feed readers are to everyone else. Of course I’m no expert on financial data, so I wouldn’t even know where to start.

  19. Hello,
    How about your FreeBSD lack support?
    Why don’t you allow FreeBSD to redistribute JDK 1.5?
    Thank you,
    Powered by [url=http://www.FreeBSD.Org/]FreeBSD Free Unix server OS[/url]

  20. [Trackback] The Chairman of the SEC, Christopher Cox, was having a dialog with Jonathan Schwartz of Sun Microsystems about using blogs for reporting financial results. Mr. Cox seems to be open to this notion, which makes a ton of sense. Posting financial results to

  21. I always find time reversal a useful mental device to check whether change is good / bad / or neutral. Suppose we started from the time when business blogging is fully accepted as a way of ensuring transparent corporate disclosure and indeed is the only one that is being used. Moving back in time, how easy would it be to get the world to accept the present ways it is done in the traditional media. If we applied the same questions as are now being applied to blogging, I’m not sure the traditional methods would be able to fight their way back in as allowable channels.
    We’ve always done it that way is an argument of zero weight.

  22. Gary

    So, is Mr Cox’s response a yes ? No ? Not sure ?
    I think a simple reply as above would have done to what was a perfectly reasonable question.

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