internetnews.com: Merrill to Sun: ‘Cut and Focus’ or Be Acquired

“A prominent technology analyst for Merrill Lynch is urging the
CEO of Sun Microsystems to slash as much as 15 percent of its
workforce and focus on being a niche player in mission critical
computing–or risk joining the ‘carcasses’ of formerly-great
companies DEC and Data General at the bottom of a tech
‘ravine.’

“In an open letter to Sun’s chief executive Scott McNealy urging
the company’s board to take action, Steven Milunovich wrote that
‘Sun faces a crisis. It’s necessary to cut expenses to assure
profitability and narrow the product focus to reestablish a clear
value proposition…’

“‘If Sun doesn’t change, the company will go farther downhill. A
large installed base and strong balance sheet will act as brakes on
that slippery slope, but the bottom of the ravine is filled with
carcasses such as DEC, Data General, Compaq, and others,’
Milunovich wrote…”

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