McNealy Speaks for Himself

By Peter Galli  |  Posted 2006-04-18 Print this article Print

But others question whether those criteria, if they were even McNealys, have been met. In its fiscal second quarter ending in December, Sun reported a 17 percent rise in revenue from $2.84 billion to $3.34 billion. But it posted a net loss of $223 million, or 7 cents per share compared with a year-ago net profit of $4 million.
In addition, the fall in revenue of nearly 40 percent between 2001 and 2005 has not been offset by the 27 percent drop in operating expenses over the same period.
Compare that to reports from competitors like Cisco, HP and IBM, who also took some pain during the dot-com bust but are now in far better financial shape than Sun, and it sure doesnt sound like costs are under control or that McNealys "job" is by any means done. Sun reports its third-quarter results on Monday, April 24, which might give a clearer picture of where the company is headed. And the final factor in all the latest buzz was a lengthy and stinging article about Suns failures, penned by John Shoemaker, who was its executive vice president of worldwide operations from 1990 to 1994 and then executive vice president and general manager of computer systems from 1995 until his retirement in 2002. In the article, entitled "A Personal View of Sun Microsystems" and published in the January-February issue of Business Horizons, the journal of Kelley School of Business at Indiana University, Shoemaker said that, while hopeful about Suns future, "The bottom line is that its all about quality leadership. Perhaps there will still come a time when the leadership problem at Sun will be effectively and decisively addressed." And, while he also stated that "this opinion is just my personal view and is intended only as food for thought for Business Horizons readers," he went on to say, "I do think this perspective is shared by many who were and are still at Sun Microsystems." So, after hearing from my sources inside and out of Sun, from those who insist McNealy is going nowhere and those who believe his departure is imminent, I decided to e-mail the man himself and see what he had to say. He responded, as he is wont to do, and this is what he said: "Sorry, dont comment on rumor, though the rumor that I am leaving Sun is about 22 years old and still going strong. You should be writing about the runaway success of Solaris 10!" My gut feel is that theres unlikely to be a management shakeup as early as next week, but maybe we should start looking toward July, the start of Suns fiscal year. Maybe thatll be when it happens! Check out eWEEK.coms for the latest news, reviews and analysis on IT management from

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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