Sun Micro CEO calls it a day after 24 yrs

Charles Assisi / TNN / Apr 26, 2006, 12:07 IST

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Scott McNealy, founder and CEO of Sun Microsystems will continue as chairman of the company, conceded control to Jonathan Schwartz, his handpicked successor.

Sun Micro CEO calls it a day after 24 yrs

MUMBAI: That Scott McNealy, founder and CEO of Sun Microsystems would step down was a given. Over the last ten-odd days, newspaper and magazine reports were buzzing with speculation that the longest-serving CEO on Silicon Valley was finally ready to throw in the towel.
But when the Wall Street Journal confronted him with the question, his response was vintage McNealy."That rumour is about 22 years old and still chugging".
And then, in a move that stunned veterans in the Valley, on Monday, Mc-Nealy, called it a day. Though he will continue as chairman of the company, he conceded control to Jonathan Schwartz, his handpicked successor.
Most people reckon the brash, very un-CEO-like CEO was forced to take a bow on the back of a $217 million net loss. But that, again, is very unlike McNealy. Situations like these weren't entirely unfamiliar to him.

Way back in 1982, he was the not so-obvious choice to join Sun Microsystems a start-up on Stanford University's sprawling campus. Co founded by Vinod Khosla, an alumnus of IIT Delhi and now his classmate at the university's School of Business; he was looking for a CEO to run the company.
Others on board included Bill Joy, resident programming genius and Andy Bechtosheim, a doctoral candidate working on computer networks.

Between the three of them, they had taken a liking to McNealy.
He had started life at Harvard wanting to study medicine, but switched to economics. Getting into Stanford though took him three attempts. Worse still, unlike most people who elected to major in finance at Stanford, McNealy chose manufacturing.
And he wasn't exactly Tec savvy. But they reckoned there was something special about McNealy. Darned right they were. Sun, under McNealy, went on to emerge as one of the most influential technology companies in the world.
But it was never easy. Ever so often, his capabilities as a leader came under a cloud. The first time he was taken to the cleaners was in 1998 when Sun posted $1 billion in revenues, meteoric for a six-year old company.
But the growth in sales came at a price - Sun was undercutting competitors and had razor-thin margins to show for it. Compounding the problem was that its manufacturing systems weren't in place to deal with an overflowing order book position.
It fuelled rumours that the company had outgrown McNealy and that he'd quit. McNealy couldn't be bothered. He had to move on to the next big idea, the next big sale.
Eventually, the bickering died down. Because by then, he had given Sun and the world, it's next big theme. "The network is the computer."

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