EXECUTIVE PROFILE: Sun Microsystems' Scott McNealy

In business, 49-year-old McNealy has long been known for his offense, usually in the form of vociferous attacks on arch-rival Microsoft. Yet this year, as Sun struggles under great pressure,

November 23, 2003

2 Min Read
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A good hockey player, even an amateur one like Sun Microsystems Chairman and CEO Scott McNealy, has to be versatile. You have to be able to play both offense and defense and switch from one to the other at a flick of the puck.

In business, 49-year-old McNealy has long been known for his offense, usually in the form of vociferous attacks on arch-rival Microsoft. Yet this year, as Sun struggles under great pressure, McNealy's also showing what he can do on defense.

Santa Clara, Calif.-based Sun's pocketbook has been hit hard. Revenue fell 8.5 percent from the previous year to $11.4 billion for the fiscal year ended in June. Worse yet, the company took a $1 billion noncash charge for the fourth quarter and then posted a $286 million loss for its first quarter ended Sept. 28.

And there appear to be more dark days on the horizon. Linux and Windows are cutting into Solaris revenue, and Sun is losing market share in the server business. Sun has responded with defensive initiatives such as a low-cost computing push whose marketing message is pure McNealy: "Low Cost, No Compromise."

He has also kept pressing Sun's software strategy, the goal of which is to create what he calls an "integrated operating environment",a full stack of Java software integrated with Sun's Solaris OS,with a regular upgrade cycle and a yearly pricing structure.McNealy acknowledges that software hasn't been delivered for Sun yet, but he says the strategy is misunderstood by critics. He is also quick to remind people that Sun has almost $6 billion in cash on hand. And he has remained characteristically defiant, even in the face of Merrill Lynch analyst Steven Milunovich's scathing report on Sun's problems, in which he said McNealy could use a personality "makeover" to tone down his "brash and contrarian" nature.

All in all, McNealy's moves this year reveal something you could have expected from him: He appears to believe that the best defense is a good offense. Says Rob Mock, CEO of Dewpoint, a Detroit-based member of Sun's VAR council: "You've got to give McNealy credit for being sincere in his convictions. As a Sun stakeholder, I just hope he's sincerely correct."

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