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.

Before it's here, it's on the Bloomberg Terminal.