Sun Solution Providers Stunned By Zander's Resignation

"This is a total shocker," said Steve Israel, executive vice president of AMC Corp., a New York Sun solution provider. "There is a big reshuffling and shakeup going on at Sun. . . . I hope the shakeup is what Sun needs to get them going again."

Israel said Zander was a big channel booster who will be missed by solution providers. "I am sorry to see Ed Zander go," said Israel. "Zander is a New York-style businessman that understood the channel and the economics of the channel. I hope whoever replaces him is as channel-friendly as he was."

Zander's departure, which Sun announced Wednesday morning, also caught investors off-guard. Sun shares were down 14 percent, or $1.18, in early afternoon trading, reaching a new 52-week low of $7.

Sun said Chairman and CEO Scott McNealy will take over Zander's responsibilities effective July 1, the start of Sun's new fiscal year.

Zander, who was responsible for overseeing Sun's day-to-day operations, had been with the vendor for more than 15 years. His departure comes on the heels of the resignation last week of Sun CFO Michael Lehman. In addition, on April 16, John Shoemaker, head of computer services, said he was retiring.

The departures come after Sun reported three straight quarterly losses, most recently a $99 million loss in its fiscal 2002 second quarter. So far this year, Sun has averaged $3 billion in quarterly revenue, down from an average of $4.2 billion over the previous two years.

Irv Miglietta, executive vice president of Strategic Technologies, a Cary, N.C., solution provider that has been a Sun partner for 16 years, said he was also surprised by Zander's resignation but has confidence that McNealy is making the right moves. "McNealy is the biggest channel booster at Sun," said Miglietta. "I am sure whoever he brings in will have that same channel commitment. I am not concerned about it."

Miglietta said Sun is just one of many vendors that are being hit with changes at the top level of their organizations. "Everyone is reviewing their costs," he said.

Ed Gogol, director of enterprise systems at Solarcom, a Norcross, Ga.-based Sun solution provider, said he does not expect Zander's departure to have an impact on the channel. "At the executive level, we deal with Gary Grimes anyway," he said.

Solarcom's Sun business has been going quite well, especially with new projects in the CRM and ERP markets, said Gogol. "We're seeing a lot of activity on the storage side as well," he said. "Sun's Hitachi storage relationship has prompted a lot of business. We are now using storage to approach a lot of clients. We've been able to use it to open a lot of doors. Of course, disaster recovery is on everybody's mind. The bulk of our sales calls are related to SANs, storage consolidation and server consolidation."

STEVEN BURKE contributed to this story.