Sun Reorganizes Sales and Services, Loses Software Chief

Published: March 23, 2006

by Timothy Prickett Morgan

It was busy last week in the executive offices of server and software maker Sun Microsystems. First, the company announced the retirement of Bob MacRitchie, an executive who has been leading its worldwide sales organization. And then next, word leaked out that John Loiacono, who has been running the Sun Software division, will be leaving the company to take a job with Adobe.

A Sun spokesperson confirmed Loiacono's departure, and said that while he has been at Sun for nearly 20 years and has grown to become one of the company's key executives, an opportunity at Adobe, which specializes in document processing, graphics, and Web application development tools and which is arguably more of a household name than Sun, had come up that Loiacono could not pass up. For the moment, Jonathan Schwartz, Sun's president and chief operating officer, who ran Sun's software unit before Loiacono took it over three years ago, will temporarily take over running the software division until a replacement is found. Loiacono's last day at Sun will be March 24, and Sun could not confirm what position he would be taking at Adobe.

The spokesperson did say that Sun has contingency planning in case executives depart, and would be able to quickly fill the role from inside the company. So, Steve Mills and Steve Ballmer, looks like you will have to keep your jobs at IBM and Microsoft for a while longer.

During Loiacono's term as executive vice president for Sun Software, Sun rolled out the Solaris 10 Unix operating system, made it freely available, and packaged the companion Java Enterprise System middleware stack and offered it on a per-employee basis. And then, starting in 2005, Sun began the process of taking both Solaris and JES open source. To say that this has been a tumultuous time for the Sun Software division is an understatement.

In the wake of MacRitchie's retirement over in the sales organization, Sun has tapped Don Grantham, the executive vice president in charge of Sun Services, to run a combined Global Sales and Services organization. HP pulled this same tactic when it came up short of executives a few years ago, but in that case, the executive, Peter Blackmore, a former Compaq executive and one of the few who attained high status in the merged HP-Compaq, was being pushed aside for poor sales results. While Sun's sales have not been stellar in the past four years, MacRitchie is actually retiring. And with so many of Sun's products being open sourced and turned into services, the alignment of services and sales makes a lot more sense than it does for the much larger HP, which has much larger product and services businesses that perhaps several people should be running in concert. Grantham reports to Schwartz in his new role, and he will continue to be a member of Sun's executive management team, which reports to Chairman and CEO Scott McNealy. Grantham joined Sun in 1999 after 17 years at IBM.