JavaSoft reined in Sun shuffle

In a major reorganization, Sun Microsystems said today that it will eliminate its individual operating companies and move to a set of divisions focused on products, technologies, and services under chief operating officer Ed Zander, who was promoted to that post in January.

The company said it would form two new divisions focused on the networked storage and consumer/embedded markets, signaling that Sun is giving those segments new importance.

"The changes are designed to build on the company's strength in network computing in both enterprise and consumer markets and to further accelerate the company's time-to-market and product development processes," Sun noted in a statement.

The new structure "will allow Sun to respond to and capitalize on new markets and new opportunities quickly and effectively," Zander added.

But the corporate overhaul may also reflect the so-far abysmal failure of Sun's efforts to sell its JavaStations--network computers that CEO Scott McNealy and Zander have promoted as alternatives to Windows-based PCs. McNealy's role remains unchanged in the reorg.

The top-level moves could likely bring greater coherence to Sun's internal politics. The collection of separate companies at Sun were not known for their cooperation, said sources. Jockeying for position was common. Development on the JavaOS, for instance, was partially within SunSoft.

As divisions, there is an expectation that the groups will speak to each other more now.

"There was probably more efficiency and some synergies and just a lot of practical reason for this reorganization," said Greg Blatnik, vice president at Zona Research. "Some of the independence [of Sun units] started to create contention among those organizations."

Seven division presidents and chief technology officer Greg Papadopoulos will report directly to Zander. They include Masood Jabbar, head of Sun's computer systems division; Mel Friedman, leading the microelectronics division; John McFarlane, president of the Solaris software division; Alan Baratz, head of Sun's Java software division; Lawrence Hambly, head of customer services; Janpieter Scheerder, head of the new networked storage division; and Mark Tolliver, president of the new consumer/embedded markets division.

Sun employees expect the reorganization, which has been rumored for weeks, will be followed by several weeks of transitions within the new divisions as their leaders move people around to address their new mandates.

Many of today's executive changes announced reflect a shift in Sun's power structure at Sun that started with Zander's appointment as COO in January.

Jabbar, who replaced Zander as Sun's hardware company in February, gets a job with roughly the same responsibilities.

In March, Friedman became president of Sun's microprocessor division, replacing a departing Chet Silvestri, who some sources said had clashed with Zander in the past. His duties appear to be unchanged.

The largest change seems come for Janpieter Scheerder, formerly president of SunSoft (Sun's software arm), where he oversaw development of the oft-delayed JavaOS and SunSoft tools. Scheerder will run the new storage division.

Software development will now be split among the Solaris division, which will handle Solaris software; the embedded products division, which will handle the JavaOS; and the Java division.

Although industry watchers have focused for weeks on JavaSoft's visible failure to make money, most of Sun's Java activities appear to have been consolidated under Baratz, JavaSoft president before this reshuffle. The SunSoft software subsidiary previously marketed some Java tools, but development tools and developer programs for Sun's Unix-based Solaris operating system will become Baratz's responsibility too, according to an individual close to JavaSoft.

Still, Java microprocessors remain in Sun's microprocessor division, and the Java operating systems for small embedded and consumer devices is expected to move to the new consumer unit, Blatnik noted.

Last week, Sun posted a jump in third-quarter profits and a 12 percent increase in revenues, fueled by sales of its new low-end workstation. The earnings met analysts' expectations but revenues were below some analysts' forecasts.

Tim Clark and Brooke Crothers contributed to this report.