Rumor: Sun Setting for Sun's CEO?

The VAR Guy picked up the phone and dialed Sun Microsystems Inc.'s investor relations department. When the call went to voicemail, he left this message: "Are the rumors true? Is Sun seeking to replace CEO Jonathan Schwartz?" Here's more on the rumor, and The VAR Guy's depressing reaction to it.

The VAR Guy

July 10, 2008

2 Min Read
Rumor: Sun Setting for Sun's CEO?

SchwartzThe VAR Guy picked up the phone and dialed Sun Microsystems Inc.’s investor relations department. When the call went to voicemail, he left this message: “Are the rumors true? Is Sun seeking to replace CEO Jonathan Schwartz?” Here’s more on the rumor, and The VAR Guy’s depressing reaction to it.

Trip Chowdhry of Global Equities Research wrote in a newsletter that a “search is probably on to find a new CEO at Sun.” The rumor was picked up today by Barron’s Online. Does that mean current CEO Jonathan Schwartz is about to get the boot? Personally, The VAR Guy hopes not. But professionally, he can understand why Schwartz may be on the ropes.

What’s super-strange about all this is Barron’s didn’t mention whether they called Sun for comment. Heck, even The VAR Guy left a message for Sun investor relations seeking comment. (Update July 10: Sun sent Nine Lives Media Inc. — thevarguy.com’s parent– an email statement indicating that the company had “no comment.”)

Schwartz inherited quite a mess when he was named CEO in April 2006. Sun was a legacy, proprietary hardware company trying to strengthen its hand in software, services and open source. The VAR Guy gave Schwartz rave reviews when he met the CEO at a SugarCRM conference in May 2007. And he was impressed again when Schwartz orchestrated Sun’s $1 billion takeover of MySQL — the fast-growing open source database company.

But Sun’s stock is trading at a 52-week low and is down 50 percent since Schwartz took over, according to Barron’s.

If change is coming, perhaps we should all circle August 1, 2008, on the calendar. That’s when Sun is slated to announce quarterly results — a natural opportunity to update investors regarding corporate leadership.

If Schwartz becomes the fall guy for past mismanagement, let’s hope Schwartz gets lots of credit when MySQL emerges as one of the smartest IT acquisitions of of the decade.

Update July 10: A reader accurately pointed out The VAR Guy’s goof: In the opening sentence of this blog entry, The VAR Guy originally wrote “Schmidt” rather than “Schwartz.” Ouch! Correction made.

Update #2 on July 10: Sun just emailed thevarguy.com and offered “no comment” on the rumor.

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