Scott McNealy, co-founder of Sun Microsystems Inc. stepped down as CEO after 22 years Monday as the pioneering maker of computer servers reported its latest quarterly loss.
Jonathan Schwartz, Sun's president, will retain that position and take over as chief executive, while McNealy will remain chairman and a full-time employee of the Santa Clara-based company.
"This isn't about me. It's about a big moment in Sun's history and I'm proud to share that with you," McNealy said on a conference call. "There's lots more work to do and I'm certainly going to stay around and support that."
McNealy's mantra "The network is the computer" helped Sun grow into one of the dominant providers of large computer servers that sell for tens of millions of dollars apiece. Following the collapse of the Internet bubble in 2000 he saw revenue decline and frequently came under pressure for not cutting costs enough.
McNealy, 51, co-founded Santa Clara-based Sun Microsystems in 1982, developing it into a scrappy Silicon Valley startup whose high-powered computers, called workstations, became a major staple with engineers and businesses.
In 1996, after Microsoft products began encroaching on Sun's territory, McNealy reinvented the company as a maker of servers, which performed the same tasks as mainframe computers for a fraction of the cost. The co-founder was also known as one of Microsoft's harshest critics and was known for his biting remarks.
Sun's servers, which came about just as the Internet was morphing from an academic hobby to a mass communication platform, helped speed the transformation.
On Monday, Sun posted a wider fiscal third-quarter loss, as costs for acquisitions, stock-based compensation and restructuring chipped away at higher revenue.
The net loss for the last fiscal quarter ending March 26 was $217 million, or 6 cents a share, compared with $28 million, or 1 cent, in the same period last year.