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Sun Sets On McNealy As CEO

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Sun Microsystems president Jonathan Schwartz has moved up to the CEO position vacated by Scott McNealy, who will stay on as chairman of the company.

McNealy will also oversee Sun Federal Inc, a division focused on Sun’s government customers, the company disclosed today. Rumors of McNealy’s movement out of the CEO job began percolating in earnest in March, when an analyst with Caris & Company cited three reasons McNealy would step down:

Three criteria had to be met before McNealy would consider stepping down – reestablishing product superiority, regaining control over costs and igniting demand in a broad and balanced customer base. (Analyst Mark) Stahlman thinks that has all been fulfilled:

“In our opinion, these three criteria have largely been met,” wrote the analyst in a recent report. “Accordingly, we will not be surprised if McNealy does indeed decide to step down.”

The analyst believes that Sun has successfully exited a “deadly downward spiral” and is now transitioning to a new set of market and product conditions.


McNealy is one of Sun’s original founders, sharing a historic place in the annals of computing with co-founders Andy Bechtolsheim, Bill Joy, and Vinod Khosla; they founded the company in 1982.

More chatter about McNealy’s possible departure has been bounced around the media, with a need for drastic headcount reduction, a task McNealy was reluctant to undertake, regularly observed as a reason a change would be needed in the CEO’s office.

WebProNews wonders if this will mark the end of Schwartz’s blog, last updated on April 16th as of press time. The pony-tailed Schwartz is probably one of the highest profile corporate bloggers in the US, and few executives have followed Schwartz’s example.


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David Utter is a staff writer for WebProNews covering technology and business.

Sun Sets On McNealy As CEO
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