Monday, May 20, 2024

New Sun Honcho’s Make-or-Break To-Do List

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Analysis: Sun Microsystems is full of great-sounding ideas and technology.

Open source hardware and software, multi-core servers and blistering attacks on the competition are but a few the company’s trotted out the past year.

So far, it hasn’t worked. Revenue is up but Sun’s losses are mounting.

What’s the new CEO, Jonathan “The Ponytail” Schwartz to do?

Here’s a starter list of eight suggestions courtesy of and analysts that follow Sun closely:

1) Find its own iPod. Several years ago, Apple was in a similar situation to Sun. No real direction, no raison d’être. But it wasn’t a line of new Macs that revitalized Apple, it was the iPod. Apple entered a market that had seen numerous high profile failures.

Remember the Creative Labs Rio? But iPod succeeded where so many had failed, as only Apple could do it, revitalizing both the market for MP3 players and Apple. Sun needs to show it is looking forward, not relying on UltraSPARC/Solaris to get it out of this mess.

2) Pick a rock-star replacement. Schwartz’s promotion has left a temporary gap in the president/COO position. Sun needs to bring in someone like Michael Capellas or Mark Hurd who will inspire confidence and lead things internally while Schwartz and McNealy make nice with the customers.

“Schwartz does not have the turnaround experience. It would be wise to bring in someone with turnaround experience, to bring to the table a set of skills they don’t have right now,” said Rob Enderle, principle analyst with The Enderle Group, in San Jose, Calif.

3) Rebuild relations with the employees. Mark Hurd faced the same problem when he took the reigns of Hewlett-Packard after former CEO Carly Fiorina had alienated so many of the staff there. Hurd did one round of layoffs and promised no more.

Sun has had several rounds of layoffs, and that kills morale.

Schwartz needs to make whatever difficult cuts need to be made now, and then make the same promise as Hurd, said Enderle. “He needs to get employees back on his side and focused on the future of the company and not on the future of their jobs.”

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