Gateway, Novell and Sun are irrelevant, critics say. But their ceos have made bold changes to ensure their companies can still compete. detractors wonder if these men are up for the challenge.
In many industries--and in most years--double-digit stock appreciation wins a CEO kudos from virtually everyone. But few people are patting Sun CEO Scott McNealy on the back for increasing Sun's shares by an astounding 40-plus percent in 2003. Instead, many are calling for his head. That's despite the fact that those shares outpaced those of both rivals IBM and HP, and nearly matched the performance of the overall Nasdaq exchange, which finished 2003 up 50 percent.
Why only faint praise for McNealy? Simple. Many think the one-time Internet wunderkind has lost his way and is gambling on a strategy that pits his company against bigger rivals in virtually every technology category in which it competes. The belief that Sun is in the throes of a full-blown crisis was exacerbated last fall when Sun revised a quarterly earnings report that erased a modest profit and left Sun $1.04 billion poorer. Influential Merrill Lynch financial analyst Steven Milunovich was moved to write an open letter to Sun's board of directors in which he concluded that the company "has gone from being pure in vision and predictable in financial performance to an underachieving, bloated, unfocused reflection of its former self."
McNealy's response to all this? "Sun is rocking; no need to worry," he recently told VARBusiness. "As a company, we're at the right point in the road to take advantage of new market opportunities."
Among CEOs with difficult jobs, it's not a unique attitude. Novell CEO Jack Messman tells VARBusiness that he and Novell have "probably got a better strategic position than we have ever had." That's despite the fact the Provo, Utah-based software company ranked dead last in our own 2003 study of partner expectations for key vendor companies.
Then there's Gateway CEO Ted Waitt. He remains upbeat even though his company lost more than $400 million in the first nine months of fiscal 2003 and reported a revenue shortfall of about $45 million in the fourth quarter. He envisions a point in the near future when working at Gateway will be fun. That's right: fun.
Discover the benefits of scalable backbone and network services for application and cloud providers.
Network automation is gaining momentum. Here's how you can drive this powerful technology to its full potential.
Subsea cable alternatives can provide a level of comfort for those concerned about disruptions. Realistically, they will continue to play a small, but critical role in the short term.
