Sun setting on McNealy's reign?

Scott McNealy's reign as chief executive of Sun Microsystems could be coming to an end, say analysts.

On Friday, McNealy and Microsoft's chief executive Steve Ballmer said they were going to bury the hatchet, settling their long-running legal dispute and putting an end to their war of words.

But analysts question whether McNealy could continue fronting a company that has so dramatically changed its philosophy.

Andy Butler, vice president at Gartner, said he is unsure if McNealy -- and many of Sun's other executives -- would be able to live with Microsoft as a friend because people will question if McNealy wants to be the chief executive of a company that is going to be actively collaborating and partnering with Microsoft. "He spent the whole of the 90s telling us that not only are Microsoft a competitor, but they are imbeciles -- and it I wonder if he will be able to present a revised Sun strategy," he said.

James Governor, principal analyst at RedMonk, said the change may be too much for McNealy to handle in the long run: "If you look at what McNealy has said over the years, it is very difficult for him to be a completely different person -- that is what this deal asks of him," he said.

If McNealy decides not to continue running Sun, Governor believes that Jonathan Schwartz, who was appointed Sun's president and chief operating officer, would be the ideal successor because Schwartz is very much like McNealy and has been known to be just as outrageous and aggressive in his public statements.

"Maybe McNealy will feel the company is in good hands if he decides to depart -- he would want somebody in his image and Schwartz is definitely in McNealy's image," Governor said.

Gartner's Butler agrees that Schwartz is being primed to take over the top spot: "Now they have a new CEO-elect, for the want of a better word, in Jonathan Schwartz. The speculation that McNealy is going will increase -- not because he is finished or incompetent, neither of which are true -- but because can he be the standard bearer of a Sun with such a radically different set of philosophies," said Butler.

Butler admitted that speculation is rife because the announcement was such a big surprise: "If this had happened 24 hours earlier I would have just said it was an incredibly elaborate April Fool's hoax," he said.