Scott Mcnealy and Sun Microsystems

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : LDEN039 For delivery in electronic format: Rs. 300;
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Case Length : 14 Pages
Period : 1984-2006
Pub Date : 2006
Teaching Note : Not Available
Organization : Sun Microsystems
Industry : Information Technology
Countries : USA


Scott McNealy had been the CEO of Sun Microsystems, a company that he had co-founded in 1984, for 22 years. In April 2006, he announced his decision to step down in favor of Sun's president and COO Jonathan Schwartz.

This case study discusses the various events at Sun under McNealy's leadership. It traces the company's growth from a small startup in the mid 1980s to one of the driving forces behind the internet economy in the 1990s. It also talks about the events that led to Sun's decline in the early 2000s, and McNealy' failure to arrest this decline. The case concludes with a discussion of the leadership change at Sun and whether Schwartz was the right person to give the ailing company a new lease of life.


  To study the rise and fall of one of the major companies in the IT industry, and the role of its founder in its initial success and later troubles.

  To analyze the relationship between leadership and growth.

  To appreciate the effect of changing business environmental scenarios on companies and the need to respond to these changes rapidly.

  To examine the relationship between innovation and success, and to understand that developing cutting edge products does not automatically translate into financial success.

  To understand the importance of flexible business models, especially in markets with rapidly evolving technologies.


  Page No.
The End of an ERA   1
Background   2
The Golden Years   4
The Decline   8
Conclusion 12
Exhibits 13


Scott McNealy, Sun Microsystems, UNIX, Solaris, SPARC, Java, Linux, Microsoft, Windows, Intel, Dotcom Crash, Networking, IBM, HP, Leadership.

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