Gartner's Fall Symposium in Orlando, Florida. Sunshine, palm trees, Mickey Mouse and a re-casting of old computing themes in new names. There's also the perennial cavalcade of executive keynotes from industry heavyweights: Intel's Craig Barrett, HP's Carly Fiorina, MCI's Michael Capellas, Microsoft's Steve Ballmer and Sun's Scott McNealy.
Barrett, Ballmer, Fiorina and Capellas were present and accounted for, but no McNealy this year. No calling Microsoft a "hairball" or IBM a company that wants to "Hoover your wallet." Scott's absence at the event was noted by many attendees. What could be more important, at this critical point in time for Sun, than the opportunity to communicate his vision for turning Sun around to 6,000 important (or potential) customers? There are attendees here that allegedly pay US$86,000 a year just to be a part of Gartner's most elite group of pampered CIOs and get access to the industry heavyweights.
According to a Gartner spokesperson, "Scott couldn't make it. There was a conflict in his schedule, perhaps due to the fact that the conference is being run a week later than it is normally run each October." But when asked the same question, Sun's spokespeople were mum. A search of the Web revealed no record of any public appearances this week. For as long as the agenda for the event has been published, his name hasn't been on the docket.
If there's any question about his priorities, then that question is probably reflected in the next question I'm hearing from several sources: is it time for McNealy to step aside?
It has been a few weeks since Merrill Lynch analyst Steve Milunovich wrote a note to that firm's clients in the form of an open letter to Sun's CEO Scott McNealy. The note was sent in response to one of the worst revelations in Sun's 21-year history regarding the company's performance. Those revelations officially materialised in last week's reporting of Sun's quarterly performance, which McNealy addressed by saying "We're doing our best to be a disruptive innovator. We think it's working. It's not showing up in the numbers, and we're not happy with that."
In the letter, Milunovich suggests that Sun's recent attempts to reinvent itself don't go far enough, and he offers McNealy advice on how to bridge the remaining gap. At the top of the list is an attitude adjustment for McNealy and a 7,000-person workforce reduction. After the latest announced cut, approximately 35,000 employees will remain. (For a contrasting financial analyst viewpoint, Mark Stahlman of American Technology Research, which provides independent research to institutional investors, believes that Sun has a sound strategy moving forward.)
Now that everyone who's affected by Sun has had time to digest both the financial news and Milunovich's letter, one fundamental question remains. With US$5.5 billion of cash still in the bank, should McNealy bypass the makeover altogether and simply step aside? It's such an obvious question that I'm surprised Milunovich, who called McNealy an "impediment", didn't take his castigation that one extra step (although he did suggest the installation of a Yin-like COO to balance the Yang of McNealy). For whatever reasons, Milunovich stopped short of calling for McNealy's resignation. To find out why, I called Milunovich's offices but was unable to penetrate his call screeners and was told that "Steve Milunovich's office has declined to comment."
Since Milunovich wasn't willing to comment on the McNealy question (and McNealy turned down the opportunity as well), I thought I'd give the Gartner analysts a call. Each time I attend one of its semi-annual conferences, Gartner rolls out an army of Sun experts that seem to know the company inside and out. To find out where the research company stands on the Sun leadership apparatus, I got a hold of Gartner vice president and distinguished analyst Yefim Natis.
Natis made it clear that neither he nor his company would go on record as saying that McNealy needs to go, but questioned his leadership. "We have questioned if he is able to continue to lead without changing the vision for the IT industry that he has had. The vision has been successful over the years, but it has now become a barrier. We do believe that radical change in the company's management approach is needed. Whether that means McNealy should appoint a replacement, or should find a partner in leadership, or should step down and leave the decision to Sun's board of directors, I can't say. Those are the various options."
