McNealy passes Sun torch to Schwartz

The man who claimed he put the dot in dot-com has stepped down as the CEO of the company he ran for nearly a quarter century.

Sun Microsystems Inc. chief executive officer and co-founder Scott McNealy said this week the timing was right to install Jonathan Schwartz as CEO. The Mountain View, Calif.-based company reported a solid growth quarter and it gives Schwartz a chance to plan the next fiscal year. McNealy added that the succession was his decision and he asked and received board approval for it.

McNealy, 51, also tied up any loose ends before giving up command. He made sure the Sun launched the UltraSparc T1 chip, Galaxy, and the latest version of Solaris. He also ensured that the company’s relationship with Microsoft was on solid ground before handing over the reins.

“This is a big day for everyone and for me,” McNealy said during a conference call to announce the leadership change. “It’s been more than 22 years that I’ve been running this joint and I had a good time running it. I would love to do it more, but we have a good guy and we worked hard to get this guy here.”

Schwartz, 40, joined Sun in 1996 as part of the acquisition of Lighthouse Design Ltd., where he was CEO.

During the past decade Schwartz moved up Sun’s ladder by holding seven different job titles.

“He has something rare and it is courage, and I checked him out on character and he never blinks,” McNealy said of his heir apparent. “He executed on product lines and it’s never been better. We have no upset customers and he was a key driver in getting us back into the open and utility computing models.”

Schwartz’s first mandate as Sun CEO will be to institute a 90-day corporate growth plan, including more spending on R&D, and marketing, as well as reviews of priorities and corporate resources.“We want to align our organization for growth,” he said. “You do not build a house with a sub-contractor. You hire an architect. We are architecting a business for future technology.”

One of the first decisions Schwartz made as CEO was to double up offices in the senior management team. For example, he will share an office with CFO Michael Lehman, and McNealy will share his office with Crawford Beveridge, executive vice-president of people and places and chief human resources officer.

“The net result of this is we will add resources where we grow and prune those who do not yield returns,” Schwartz said.

McNealy will continue as chairman of the board and chairman of Sun Federal Inc., which focuses on U.S. government contracts.

In that role, McNealy will meet with heads of state and with executives of large service providers and the U.S. government. He said he will try to open doors for Schwartz and focus on key customers.

“You start a company and you wonder who will carry it on,” McNealy said. “You can’t run a company forever and it was too fast to hand it off during the bubble years. We had to get the company stabilized to get across the board growth. The time was right to do it now.”

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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