Sun's software exec to replace retiring services head

For the third time this month, Sun Microsystems announced the imminent departure of a top executive. Larry Hambly, head of Sun's services group and a 19-year company veteran, will retire shortly, the company said Friday. Replacing him as executive vice president of Enterprise Services will be Patricia Sueltz, currently executive vice president of Sun's Software Systems Group.

Sueltz, who is 49, will succeed Hambly, 55, effective July 1, although Hambly will continue working with Sueltz on the transition through the end of September. After the transition, Hambly will remain with Sun working on customer projects and employee mentoring for the rest of Sun's 2003 fiscal year, the company said. Sun's 2003 fiscal year ends June 30, 2003.

Sueltz's successor as head of the Software Systems Group will be named by July 1, Sun said.

The software group encompasses a wide range of initiatives at Sun, including Java, its iPlanet server products -- which were recently rebranded as the Sun ONE (Open Net Environment) products -- and its StarOffice productivity suite. Losing the head of that division at a time when Sun is expanding its role as a software provider is a blow for the company, according to Julie Grier, a vice president with the research company Giga Information Group Inc.

Sun is in the midst of a fierce battle with Microsoft Corp. to provide software for the emerging world of Web services, with Sun pushing Java and Microsoft promoting its .Net technologies. That makes the timing of Seultz's departure "really poor," Grier said.

In addition, she noted, Microsoft is set to introduce in July a new, somewhat controversial licensing scheme that has upset some customers. While Sun should be capitalizing on that opportunity to win new business from Microsoft, it will instead be distracted by Sueltz's departure, Grier said.

However, Sun, like other hardware makers, also needs to build up its service offerings to compensate for declining revenue from hardware sales, Grier said. Rivals such as Hewlett-Packard Co. and Compaq Computer Corp. already are working hard to expand their services offerings while IBM has built a commanding lead.

In addition to installation and maintenance services offered to its Solaris customers, Sun could be doing more to capitalize on opportunities in areas such as IT infrastructure design and systems integration, she said. Appointing a new head of services at Sun may reflect a recognition by the company that it needs to expand its service offerings.

Also planning July retirements are Sun Chief Financial Officer Michael Lehman, 51, and Executive Vice President for Computer Systems John Shoemaker, 59.

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