Sun shakes up jobs, money and partners

Saying that it is undertaking "one of the great repositionings of the post Internet bubble," Sun Microsystems Inc. not only announced Friday that it reached a settlement on antitrust charges and is collaborating with long-time foe Microsoft Corp., but also named a new company president and said further restructuring will see the reduction of some 3,300 jobs.

"There's never a dull moment around here," Sun Chairman and Chief Executive Officer Scott McNealy said during a conference call, in which he concentrated on the company's preliminary third-quarter 2004 financial results.

The real news of the day, however, was Sun's announcement that it had settled its dispute with Microsoft, with the companies dropping all pending litigation and entering into a 10-year cooperation agreement to make their products work better together.

"Our customers have been telling us that they need peace. They have Microsoft products and they have Sun products and they need them to work together. This puts peace on the table in a big time and positive way," McNealy said.

The news left some analysts and industry watchers stunned.

"If this news would have come out yesterday, I would have thought it was an April Fool's joke," said RedMonk LLC analyst James Governor. However, he said that the move showed a sense of maturity on Sun's part, that it was willing to lay down its sword and enter into a partnership that will in the end benefit customers.

"Customers don't want companies that are so immature that they won't speak to each other, let alone build products that don't work together," he said.

Although McNealy declined to comment further on the agreement until the companies hold a joint press conference later today, McNealy did say that it marked "a huge day for customers."

As part of the company's restructuring, Sun also announced the promotion of software head Jonathan Schwartz to president and chief operating officer. Schwartz joined Sun in 1996 and has since led the development and delivery of the Solaris 10 operating system and Sun's Java Systems strategy, the company said.

A successor for his previous position as executive vice president of software will be named shortly, the company said. The appointment of Schwartz comes as Sun has been putting an emphasis on its software business.

Given the company's software push, Schwartz's appointment is no surprise, according to analyst Stephen O'Grady, also from RedMonk.

"Since taking over the reigns of the software side of the house (Schwartz) has done a lot of good things -- he has, in effect, turned the software shop around and obviously has shown a willingness to make decisions, certainly controversial decisions," O'Grady said, such as a move to subscription pricing and a change in the way Sun promotes Java.

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

• Email
• Print
• Share
  • Slashdot
  • Digg
  • Stumble
  • Reddit
  • Newsvine