Sun Founder McNealy Won’t Stay On At Oracle


Chairman and co-founder Scott McNealy tells his employees that he has few regrets about doing it his way.

Sun Microsystems co-founder and chairman Scott McNealy, 55, the main face and voice of Sun throughout its 28-year history, told employees on 26 Jan. he is stepping down and exiting the company he helped start up during the Reagan administration.

McNealy told his employees and former employees in a long, rambling e-mailed memo obtained by eWEEK that he is proud of the work his company has done and the contributions it has made to IT in general, and that he has few regrets about doing it “my way.”

Several other Sun executives, including CEO Jonathan Schwartz and Chief Financial Officer Michael Lehman, will not be offered positions in the combined Oracle-Sun company, people with knowledge of the situation told eWEEK.

Word of the changes leaked out a day before Oracle was set to introduce its “Oracle+Sun” strategy. The moves were not a surprise to anyone closely following the Oracle-Sun story; only the timing of the announcement was not known.

Oracle doesn’t make a practice of keeping CEOs of large companies it has acquired. For example, the chief executives of Siebel Systems, PeopleSoft, and BEA Systems were not kept on board to work with Oracle CEO Larry Ellison following those transactions.

Back on 8 June, in a regulatory filing with the Securities and Exchange Commission, Sun reported that Schwartz was to receive $12 million (£7.44) as part of his severance package, McNealy would get $9.53 million and Lehman $4.03 million. These were all described as base severance packages, meaning that they did not include other possible bonuses.

European Commission antitrust regulators on 21 Jan officially approved the sale, enabling Oracle to do business as a full-service IT vendor in the 27 countries that constitute the European Union. The U.S. Department of Justice approved the deal in August 2009.

With the assets of Sun now in-house, Oracle will be entering new IT sectors that include data storage, processors, server hardware and networking.

McNealy stepped down as Sun CEO in April 2006 after 24 years at the company’s helm. Schwartz, meanwhile, has kept a low profile for the last nine months as Oracle proceeded with its $7.4 billion acquisition.

“While it was never the primary vision to be acquired by Oracle, it was always an interesting option. And this huge event is upon us now. Let’s all embrace it with all of the enthusiasm and class and talent that we have to offer,” McNealy wrote in his e-mail memo.

“This combination has the potential to put Sun, its people and its technology at the center of yet another industry and game-changing inflection point. The opportunity is well documented and articulated by Larry and the Oracle folks. Not much I can add on this score. This is a very powerful merger. And way better than some of the alternatives we were facing.”

McNealy also wrote, “To be honest, this is not a note this founder wants to write. Sun, in my mind, should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.

“I am more than willing to accept this outcome. And my hat is off to one of the greatest capitalists I have ever met, Larry Ellison. He will do well with the assets that Sun brings to Oracle.”

In closing, McNealy wrote, “I have few regrets (see Sinatra’s ‘My Way’) and will always look back at Sun and its gang with only pride. Enormous pride. You are the best this industry ever had, though few outside of Sun recognised it. And what we are about will live on in SPARC, Solaris, Java, our products and our spirit. Well past everyone’s recollections of what we did together. I will never forget, though.

“Oracle is getting a crown jewel of the technology industry. They will do great things with Sun. Do your best to support them and keep the Sun spirit alive and well in the industry. Our children will be better for it.”

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