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Sun Sets on McNealy's Reign as CEO

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April 24, 2006

Sun Sets on McNealy's Reign as CEO

Rob Hof

So Scott McNealy is handing over the CEO job at Sun Microsystems to Sun President Jonathan Schwartz. I guess it's not too surprising given speculation last week. And I don't yet know what this means for Sun, a company I no longer cover closely, though I'd be a little surprised if radical changes were in store. Schwartz has been running things day-to-day for some time, after all.

But I continue to find it strange that observers think McNealy's departing the top job because he found it hard to make the job cuts the company apparently needs to get fully back on track. Maybe that's true, but it contrasts sharply with what McNealy seemed to be saying many years ago. Even before Sun's big late-1990s heyday, I attended a sit-down with McNealy, along with other journalists. He mentioned at one point that there were about 30% too many employees in the computer industry, pointing to all those salespeople at Digital Equipment. This sparked a flurry of questions from the crowd of reporters, with one asking, "Well, what should those people do?" McNealy's reply: They can all start companies.

Well, this flip answer was a little too much for most of us, and the mood got kind of ugly after that. But maybe we were wrong about what seemed at the time to be Scott's callousness. Or maybe he's just right that Sun can't slash and burn its way back to prosperity. I guess we'll find out before too long.

05:45 PM

Sun Microsystems

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Rob's comment could not be more "right on". After spending 13 years with Sun, I can say that I have been on a wild roller coaster ride only to come into the station and not really know where you have been or where you really are going. One thing is for certain, with the continued reductions in force, Sun has lost valuable "IP". If things do bounce back, Sun will be looking for that "IP" and the shelf will be empty. Add on top of that, the company is really running day to day the "British" way. History has shown that won't last long.

Posted by: Tom Pickett at April 27, 2006 09:51 AM

Rob--Sun is like few other companies. I worked there less than a year as an executive speechwriter, and was impressed by the energy, ideas, and creativity. It felt like working for a multibillion dollar startup company. Every day was an adventure and of course McNealy was a sort of wild card--we never quite knew what he was going to say when he took stage (this is a sword that cuts both ways). Give him credit: he was a visionary on many levels and took Microsoft on for years, offering a viable alternative. But as you and others have pointed out, he didn't adjust to a new market, leaving Sun vulnerable to new threats like Dell. Sun also lacked the systems and processes of more successful companies. Contrary to the media reports Schwartz is a different type, and despite his admiration for McNealy (see his blog this week), he'll have to clearly break away from the Master and cut his own path--new strategy, new day for Sun. Let's hope he gets a few breaks, and it's not too late (see my posting:

Posted by: mark at April 27, 2006 12:53 PM

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