AN FRANCISCO, May 2 — Under pressure to revive Sun Microsystems after the collapse of its two strongest markets, telecommunications and Internet commerce, Scott G. McNealy, the company's chairman and chief executive, made the rounds among his senior managers recently insisting that those who were not ready to sign up for the next five years, step aside.
On Wednesday morning, the departure of Sun's president and longtime second in command, Edward J. Zander — the company's fifth major departure in two weeks — provided new evidence that Mr. McNealy is intent on clearing the decks of a generation of Sun management as he begins a drive to regain the company's dominance in many aspects of corporate computing.
Mr. Zander has provided a calming, business- and sales-oriented counterpoint to Mr. McNealy's passionate and charismatic approach for almost 15 years. He said he waited to leave until the company's revenue began to rebound, and was doing so now because it was clear that Mr. McNealy would not be stepping aside anytime soon. Several Sun executives confirmed that Mr. Zander has repeatedly talked about leaving the company during the last five years.
But what is behind the recent run of senior departures, Sun executives say, is a new focus by Mr. McNealy on building his team for Sun's next era, an approach he adopted after joining General Electric's board and becoming deeply influenced by the succession-planning process of G.E.'s chairman, John F. Welch Jr.
"Scott realized that Sun didn't have anything equivalent in place," said John Gage, one of Sun's most visible executives, "and he began going around the company and telling people, `We need you to be committed for a period of time; I don't want any surprises.' "
A crucial question is where Mr. McNealy will find a strategy for growth in an increasingly competitive corporate computing market. Microsoft's .Net software strategy is aimed at the heart of the Sun customer base, while the I.B.M. Web services software and revitalized server business is a growing threat at the high end of Sun's business. The commodity Linux server threat is eroding the company's margins.
To combat these, Sun is preparing to introduce a strategy, known internally as N1, a combination of hardware and software that will in effect combine the entire computing resources of a company — from desktop PC's running Windows, to I.B.M. mainframes, Sun servers, inexpensive Linux computers and Cisco routers — to work as one vast computer.
By assuming the post of president, Mr. McNealy is putting himself firmly at the center in carrying out that strategy. But it is also clear that Sun has installed new, technology-oriented managers in critical jobs.
For his part, Mr. McNealy demurred on the question of the executive departures, saying that the average tenure in Sun's executive management group had declined to only 9.8 years from 11.2 years.
"There's no slavery here, and our turnover rate is somewhere south of the death rate," he remarked in a telephone interview on Wednesday.
Mr. McNealy's ability to lead the company through tough times has made believers of many people in Silicon Valley, including many of the company's top executives.
Sun's previous great challenge came in 1992-93, before the Internet boom, said Eric Schmidt, chairman and chief executive of Google and a former top-ranking technical executive at Sun. "I worked for Scott as C.E.O., and he is clearly capable of driving change in the organization. He will hunker down and fight through the growth issues."
It is an approach that has worked in times of crisis. Almost a decade ago, at a computer industry conference in Arizona, after Sun had begun to pull out of its slump, Mr. McNealy, in front of a reporter, teased Sun's three other founders, William Joy, Vinod Khosla and Andreas Bechtolsheim for having sold significant parts of their stakes in the company. Mr. McNealy, who did not, said he had been vindicated.
Mr. McNealy showed some of his resilience on Wednesday, according to a number of top executives who heard him speak at Sun's annual leadership conference.
"This is not like bringing Steve Jobs back to Apple, but Scott is clearly back in the saddle," one executive said. "He was showing us he's going to be here 150 percent."
Mr. McNealy began his presentation where he normally ends it, exhorting the executives about the importance of sales for the current quarter's bottom line.
But then, he shifted gears and talked about business ethics issues raised by the Enron scandal, detailing incidents both inside and outside Sun that reflected on the company.
Then he turned his attention to competitors, saying I.B.M. was vulnerable because it had not given an accurate description of its financial position. With familiar sarcasm, he referred to Compaq and Hewlett-Packard as two "garbage trucks" six inches away from colliding.
There was less bravado in the stock market. Mr. Zander's announcement drove Sun shares down nearly 14 percent on Wednesday, and they fell 7.5 percent further yesterday, losing 52 cents, to $6.45.
Unanswered, industry analysts said, is what Sun can do to fight its way out of the fierce computer industry rivalry that is increasingly turning products into low-margin commodities. The answer, a number of Sun executives said, is in the N1 strategy, which is to be introduced in the fall. Its first pieces will be seen on May 22, when the company makes a series of announcements about its Solaris operating system.
The effect of the strategy, Sun leaders think, will be to make the company less vulnerable to bruising price battles in the computer hardware market, while giving it an effective way of responding to Microsoft's software-only approach.
It will also shift Sun's revenue and profits sharply away from hardware. An executive at a large Sun customer said Mr. McNealy had recently spelled out company strategy, stressing that it would lead to a reversal of the current 70-30 split between hardware, and software and services, over the next five years.
On Wednesday, Mr. McNealy bridled at the idea that software would become dominant, insisting that Sun's business would remain a systems business, in contrast to Microsoft's software-centric approach.
"Remember, the company name is Sun Microsystems," he said. "The world wants metal-wrapped or plastic-wrapped software."
Even as he plays down the financial contribution of software to the new strategy, Mr. McNealy has been making a series of moves to push Sun in that direction. Recently, the company named Jonathan Schwartz, a software technologist who had been serving as chief strategist, as head of software. The move brought Sun's Java business, and its operating systems and applications, into a unified organization.
Mr. McNealy also obtained a commitment to stay from one of the co-founders, Mr. Joy, an important member of the group that created the Java programming language. Mr. Joy, several executives said, now has a small group of programmers working in a San Francisco laboratory on what will ultimately be a crucial aspect of N1: how to make millions of computers reliably interact as a single system via the Internet.
