Sun Microsystems Inc said on Monday that Scott McNealy, one of its founders, was stepping aside after 22 years as chief executive, an era in which Sun helped establish the dominance of the microprocessor chip in corporate computing.
Jonathan Schwartz, the company's president and McNealy's handpicked successor, was named chief executive, effective immediately. McNealy, 51, who founded Sun in 1982 with three young partners, will remain as chairman.
The announcement came after Sun announced a quarterly net loss of US$217 million, which it attributed largely to acquisitions, but said revenue had grown more than 20 percent. Its stock showed little change in postsession trading after the earnings report, but the McNealy announcement then sent it up more than 8 percent.
In a conference call with reporters and analysts, McNealy went to some lengths to stress that Sun would stay on the course he had set to pull it out of its prolonged malaise since the dot-com collapse in 2000.
He insisted that the leadership transition was not abrupt, but was the conclusion of planning that began after a former president, Edward Zander, left the company in 2002.
"I wasn't going to hand it off when it was deteriorating," McNealy said. "We showed wonderful growth last quarter."
Schwartz, 40, a former software entrepreneur, joined Sun in 1996 when it acquired his company, Lighthouse Design. He has been known as an innovative strategist at Sun, and his trademark ponytail has helped identify him with Silicon Valley's software design culture.
Although the two men are at much different points on the political spectrum, with McNealy an outspoken conservative, they have complemented each other on business strategy.
"He and I can finish each other's sentences," McNealy said. "We're very aligned."
Indeed, both partners and customers marveled on Monday at McNealy's staying power. Sun, based in Santa Clara, California, has essentially performed well in three separate eras of computing, stumbling badly at times in the last five years.
The company was founded as a maker of computer workstations for technical and scientific computing applications in the early 1980s and rose to prominence based on the computing world's shift away from proprietary mainframes and minicomputers and toward commodity components and open standards.
In the late 1980s and early 1990s, it built a computing clientele on Wall Street and in corporate computing markets. Finally, the rise of the commercial Internet and the initial explosion of Web server computers swept Sun to peak revenue of US$18.25 billion in 2001.
But in 2000 telecommunications companies abruptly stopped spending, and Sun, which had taken to calling itself "the dot in dot-com," found itself a victim of a financial meltdown in the computing equipment market.
Still, McNealy's legacy will be not only the company he built, but also a generation of technology leaders who worked under him, including Zander, now the chief executive at Motorola; Carol Bartz, chairwoman of Autodesk, the engineering software firm; and Eric Schmidt, chief executive of Google.
"Scott is one of the great leaders of Silicon Valley," said Schmidt, who worked for 14 years at Sun.
"I'm just floored that this happened. I believed that he would continue on for the next 50 years," he said.
Vinod Khosla, a Sun founder, said on Monday that as a leader, McNealy had helped define a Silicon Valley tradition.
"Scott is one of those people who build successful companies with passion and a belief system," said Khosla, now a Silicon Valley venture capitalist.
"This doesn't happen with executives who are simply managing, based on business-process ideas. You see this same passion in people like Steve Jobs, Andy Grove and Larry Ellison, as well," he said.
The announcement on Monday came minutes after the company disclosed its results for the third quarter, ended March 26. Its net loss of US$217 million, or US0.06 a share, compared with a loss of US$28 million in the quarter a year earlier.
Sun attributed the increased loss primarily to expenses related to its acquisition of Storagetek, a storage and data backup company, and SeeBeyond, an enterprise software business. Sun's revenue rose to US$3.18 billion from US$2.63 billion a year earlier. The results were largely in line with the estimate of analysts surveyed by Thomson First Call.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique