Sunday, October 02, 2005

MercuryNews.com | 10/02/2005 | CEO sizes up Motorola, Silicon Valley

MercuryNews.com | 10/02/2005 | CEO sizes up Motorola, Silicon Valley: "CEO sizes up Motorola, Silicon Valley

Ed Zander left Silicon Valley in 2004 to take the top post at Motorola. The Brooklyn-born executive likes being the boss but has found it isn't easy running a 65,000-employee company; he says it's been harder than he imagined to shake things up at Motorola."

At Sun Microsystems, Zander had served as No. 2 behind CEO Scott McNealy for six years. In 1999, he interviewed for but didn't get the top job at Hewlett-Packard, which went to Carly Fiorina. But he finally moved into the CEO chair in January 2004 -- at Motorola.

Schaumburg, Ill.-based Motorola was ailing when he joined, having moved too slowly on new trends such as camera phones. It lost share to rivals such as Samsung and Nokia. Now the company has shown earnings improvements for six quarters, and it recently cut a deal with Apple Computer to make the Rokr cell phone that plays iTunes music.

Last month, Zander was back in Silicon Valley. He answered questions at the Churchill Club's leadership conference at the Computer History Museum. A consummate salesman once known as ``fast Eddie,'' Zander brought a silver case full of the latest Motorola cell phones that he told the crowd to buy. Afterward, he spoke with Mercury News staff writers Dean Takahashi and Therese Poletti. Here are edited excerpts from the interview:

Q How is the culture at Motorola vs. Silicon Valley?

A It's pretty obvious. We all came out here as half Type A, half crazies that want to make money, do great things, with an emphasis on speed, a sense of urgency, kill. Chicago is a lot like the rest of the world where people think about what kind of picnic to go to this weekend. It's not to say we don't want to win. It's not to say people don't work hard in Chicago. It's more a balance of life. When you're trying to be competitive with people in other parts of the world, that makes things hard.

Q When you think of the wireless industry, is Silicon Valley relevant?

A If you look at mobile technology, it's the next big thing. It's funny, if you look at where the mobile companies are, they aren't in the valley. Not the big companies. Intel is here and they are doing WiMax. Cisco is here and they are doing Internet telephony. Google and Yahoo will provide content for mobile. The valley is going to play a role in wireless, but there's a lot going on elsewhere. The venture capitalists are here.

Q So the venture capitalists can fund start-ups here that get bought by the big wireless companies elsewhere?

A That's a whole other story. It used to be when I was younger here that you only thought about going public. What's happening with the VCs is that they're funding just as many companies as they used to. The funding numbers are hitting records. But not a lot of companies are going public. Will there be enough companies to absorb all the companies getting started? You have to think about your exit strategy. It's not a growth industry the way it was in the go-go days. It's good for us and for companies that are going to buy the start-ups.

Q What's the future of the valley?

A The valley is the valley. It's the cradle of a lot of new technologies. I saw that one of the big funds here, Sequoia Capital, is opening a fund in China. This area is the base of operations. They are putting money into things outside the valley. It's the initial start-up location, but even start-ups are hiring engineering resources around the world. As a company, you have to do that. The corporate headquarters of technology companies are here. The VCs and the leaders of companies are here.

Q How do you go about shaking up a big company like Motorola?

A It's hard. It's a lot harder than I imagined. I can see we are just getting started. I don't know if it was easier at Sun. We grew to about $20 billion, and one day I wake up and we had 20,000 employees. It's hard being thrown in at the top. I always think about whether it was easier growing organically at Sun.

How do you get things done? How do you get around? At the same time, you have to produce numbers. You don't get a free lunch.

Q Do you have any advice for Sun Microsystems?

A I don't want to give advice to Scott (McNealy, CEO of Sun). I have my plan in my place. He has his plan in his place. No one plan fits all. I have fond memories of Sun. I'm hoping they can get it in gear.

Q How did you start working with Apple on the Motorola Rokr cell phone for music?

A Steve (Jobs, Apple CEO) and I started talking, and I said it would be great to bring iTunes to this mobile device. This device holds 100 songs. Apple restricted the number. That's just a beginning.

Q Is the cell phone like a PC where you are trying to cram all kinds of functions into one device?

A That's a good question. I argue with my staff. I think of the world where one day I will just have one phone number. I turn on a device and the carrier recognizes that as the only one I am going to use.

On a Saturday morning I go for a jog with my Rokr. I use another when I go to a nice dinner and want to look cool. At work, I have a different one. People will have multiple products.

There's one school of thought that says there will be converged devices. There's another school of thought that says there's one device for kids, one for the elderly. The question is how many devices do you want to carry around?

Q Which next-generation cell phone network is going to win?

A The incumbent -- because of all the money being spent outside the U.S. -- is 3G networks. Having said that, there are alternatives. Our 3G phone hits the market in the fourth quarter. It's small. Last year, the 3G phones were clunky. It will enable applications like video. People are exploring things such as WiMax (which transmits high-speed data through radio waves as far as 10 miles). Alternate networks will drive new applications, especially for WiMax in rural areas. It's not one winner.

Maybe this is politically incorrect in Silicon Valley, but it is not clear that the PC is or should be the center of the home."

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