New Sun CEO Schwartz Talks Tactics

The first thing Jonathan Schwartz will do as Sun Microsystems' brand-new CEO is take a good look at the company's resources -- both human and technical -- to make sure they're focused on the areas with the greatest upside.

In the next 90 days, Schwartz and Sun will be "embarking on a comprehensive review of all growth opportunities," he said on a conference call Monday evening.

First, Greg Papadopoulos, now executive vice president of R&D, and Schwartz will oversee Sun's nearly $2 billion R&D budget, Schwartz told a quickly convened teleconference Monday night after the company's earnings call. Papadopoulos had been CTO for the Santa Clara, Calif. company.

Anil Gadre, CMO and Don Grantham, executive vice president of global sales and service, will examine the company's marketing, sales, services, systems engineering and operations both at headquarters and in the field to make sure they target the biggest opportunities

Schwartz cited open-source Solaris -- which he claims has seen more than five million downloads -- as one huge opportunity.

Michael Lehman, CFO, and Bill McGowen, senior vice president of human resources, will review corporate resources across the world.

On the call, outgoing CEO Scott McNealy said Schwartz's promotion was done at McNealy's behest. "This was my decision and was supported by the board. This was my recommendation, which I've been developing over the last six or seven years."

That contention may raise eyebrows among company watchers who have long said McNealy's refusal to cede power has led to an exodus of qualified top lieutenants including Ed Zander, now CEO of Motorola.

Perhaps anticipating questions over the timing of the announcement -- which came as Sun announced large third quarter losses, McNealy said "this is our weak quarter. Let Jon announce the strong quarter."

Indeed the quarter was problematic, although Sun touted some bright spots. Losses soared to $217 million for the quarter ended March 31, up from $28 million for the year-ago period. Revenue grew 21 percent to $3.2 billion, compared to $2.6 billion a year ago.

"We're driving after efficiency and we're driving after teamwork," Schwartz said, noting that most of the top-tier execs will even share offices to make his point.

McNealy will bunk with Crawford Beveridge, chief human resources officer, Schwartz with Lehman.

Both Schwartz and McNealy said that McNealy will remain on as an active and full-time chairman, continuing to beat the drum for Sun technologies. McNealy said he will be on the road more than ever, visiting large customers and "heads of state."

Sun partners took the news in stride. A change in McNealy's status has long been rumored, especially since the dot-com bubble burst took a huge toll on the company.