Sun's McNealy: IT's own 'Billy no mates'

Ed Zander's departure from Sun Microsystems could spell the end of the company's dreams of becoming a top web services player.

The departure of CEO Scott McNealy's right hand man is just the latest in a spate of high profile walk outs.

Over the past two weeks McNealy has waved goodbye to his chief financial officer, Michael Lehman, the executive vice president of the computer systems business, John Shoemaker, head of Sun's enterprise services business, Larry Hambly, and the vice president of its Linux developing business unit, Stephen DeWitt.

David Taylor, president of IT directors' association Certus, said: "The company is haemorrhaging at the moment - a staggering number of key people have left."

The loss of these executives, he added, puts McNealy in a dictatorship position.

"He might have been the right visionary a few years ago but he's lost it now."

Clive Longbottom, analyst at Quo Circa, agreed. "The writing is on the wall for Sun," he said. "McNealy is another Larry Ellison - he needs to be in control rather than do what Bill Gates did and take a step sideways to let someone else [Steve Ballmer] take control. Under McNealy we're just going to see another Digital - a rerun of a great company going down."

Longbottom claimed it is highly likely McNealy will come under pressure from shareholders to carry out some major changes.

"A lot of people have been prescribing change but it hasn't gone down too well with the faithful in the company. We'll see more pressure on Scott but he won't be able to compete and he'll need to find a buyer."

Fujitsu is the best fit in the market at the moment, said Longbottom. It is the biggest seller of SPARC chips apart from Sun and could happily subsume its services division, he predicted.

However Taylor disagreed, stating Sun is a bad buy at the moment.

Sun is also accused of losing its direction as it struggles to promote its web services and Solaris products.

Longbottom said: "Sun can no longer ride high on its history. Solaris is not the only platform for large scale computing - there is a lot of competition now from Microsoft as it betters the scalability of Windows."

All these problems have been compounded by the executive exodus, said Taylor.

Sun's share price sunk even lower when it opened on the Nasdaq today to $6.92 from yesterday's close of $6.97.