Most Unlikely Turnaround

marcio sanchez/ap photo

Jonathan Schwartz

Sun Microsystems

Ever since the dot-com bust, Sun Microsystems has replaced Apple Computer as Silicon Valley’s lovable loser: a software company admired for its innovations and scrappy corporate culture but somehow destined to lose out against bland giants such as Hewlett-Packard and IBM. And when 41-year-old Jonathan Schwartz was named CEO in April, many critics figured the odds of a turnaround got longer still. At that point, Schwartz’s major claims to fame were his geeky brilliance and well-read blog. Lo and behold, Schwartz is starting to prove the naysayers wrong. Since July the stock has risen some 40%, as Wall Street has come to have more faith in major planks of Schwartz’s plan. Losses have declined thanks to steep cost- cutting and improved sales of key products, and Schwartz is starting to win over skeptics with his longer-term plan to lift margins back into double-digit territory. He’s even being taken seriously on the larger stage: Washington took note when he proposed that companies be able to use their blogs to disseminate sensitive financial information now covered by federal disclosure rules.

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