Sun Microsystems (NASDAQ:JAVA) has not done much right in the last few years. The company replaced founder Scott McNealy as CEO with Jonathan Schwartz who wears a ponytail and writes a blog.

The promised turnaround at Sun fell apart as the company announced lower sales and a loss. At the server firm, revenue for the third quarter of fiscal 2008 was $3.266 billion, a decrease of 0.5% as compared with $3.283 billion in the same quarter a year ago. Sun posted a net loss for the quarter of $34 million, or 4 cents per share, as compared with net income of $67 million, or 7 cents per share, last year.

Sun's plans to compete with the likes of IBM (NYSE:IBM) and other larger rivals have fallen apart. According to the company, the economy has not helped.

Sun may blame the economy, but it has run out of excuses. It will fire another 2,000 or so employees. Schwartz should be among them. The company's board should have difficulty viewing him as a viable leader, but it has made the great mistake of doing nothing.

Sun's shares traded below $14 after hours yesterday, which would put them under their 52-week low. The company's performance is humiliating and it is a sad fact that so many people have to pay for the inability of Schwartz to keep his promise of making the company a viable competitor.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

Although Sun Microsystems, Inc. (NASDAQ: JAVA) is a leading global supplier of networked computing products, its recent history of profitability has seen its share of ups and downs. CEO Jonathan Schwartz, who is famous in the business world for his corporate blog, continues to bet the company's future on open-source software support and storage hardware.

It's working in some form, as the company reported $89 million in net income in its first fiscal quarter, starting its first string of four consecutive profitable quarters in more than 5 years.

Much of that is due to corporate belt-tightening more than gobbling up tons of sales and seeing results of strategy shifts after company co-founder Scott McNealy left the CEO position a few years ago. Still, sales have slowly gained steam as the company has ramped up its share of the computer server and storage business. It's been fast enough for most investors -- just not all.

To prop itself up in the markets, Sun performed a 1-for-4 reverse split back in December after a 16% price decline in 2007 alone. It's unclear if Sun can make enough money moving forward with the open-source strategy it now has with its Solaris software and Java software, and whether support on that software combined with hardware sales can make for future profit growth once cost cutting sees a slowdown.

An analyst at Citigroup upgraded Sun Microsystems (NASDAQ: JAVA) today. But that did not help the shares. They are down over 8% and are the most heavily traded shares on the US exchanges. Over 150 million shares are likely to change hands before the closing bell.

24/7WallSt.com wrote that the Sun turnaround, to be engineered by blogger/CEO Jonathan Schwartz, has lost all of its momentum because revenue is growing at only 1%. Improvements in net income are very modest and due almost completely to one-time cost cuts. As we wrote: "Sun's turnaround, Schwartz's big talking point, is over. It did not work. Sun is a 2% to 3% topline growth company in a world where big tech is delivering double digit revenue improvements."

With the shares heading back toward $5, they are barely above where they traded when Schwartz was promoted in April 2006.

Bring back old CEO Scott McNealy. At least he used to make fun of Bill Gates.

Douglas A. McIntyre is an editor at 247wallst.com.

Sun Microsystems, Inc. (NASDAQ: JAVA) wants to make yet another strategic change in its core business, according to CEO Jonathan Schwartz. Schwartz said yesterday that the open-source and server company plans to increase its focus on storage products and services using an internal reorganization to do so.

For this, Schwartz wants to merge the server and storage business units into a single unit focusing on storage and server convergence. In effect, Sun wants to sell and service more storage systems to make up for the lack of margin in its server business. At least, that's how many are reading this move. Since acquiring StorageTek years ago, this move was anticipated. It's now here.

In addition to making StorageTek's product lineup more profitable to the company, Schwartz also may be making the move to fall in line with "virtual server" trends in the information technology field. In a sense, customers don't care about buying servers or storage, but are interested in possibly "renting" a virtual server and storage system that acts as a single unit. This is precisely what Sun will try to push to customers as it slowly dumps aging mainframes.

According to Schwartz, Sun "wants to be in a position to innovate on its [customers'] behalf, at the system level, beyond the boxes -- across blades [servers], racks, disk and tape." Let's see if this recent internal reorg and change in customer philosophy will have a positive revenue effect for Sun -- something it desperately needs.

Sun Microsystems (NASDAQ: JAVA) has been on a wild ride in recent years. The company has been battered in the corporate space as cheaper hardware and operating system alternatives (like Linux) cropped up and stole profitable market share from the Silicon Valley stalwart. When company founder Scott McNealy handed the reins over to then-CEO Jonathan Schwartz, many investors did not know what to think. By now, they probably do.

Sun has delivered profitability for three straight quarters after making its once-proprietary Solaris operating system an open-source product, and it's mirrored a good deal of IBM's move to a revenue model built on services instead of software and hardware. With computer server hardware still rapidly moving into the commodity stage (if it's not there already), this move could not have come any sooner for Sun. Schwartz knew it, and acted in time.

Schwartz presented Sun's plans for cost initiatives and growth plans for the new fiscal year early this morning in New York City while many investors and Sun pundits watched and listened with a careful and scrutinizing eye (and ear). With Sun shares up over 6.5% in just the last week, what was the chatter from today's announcement? The meeting began at 8am EST today, and transcripts and audio downloads are available here.

Sun Microsystems Inc (NASDAQ: SUNW) held its annual investor's day with the investment community yesterday. Analysts seemed not to share Jonathan Schwartz's, CEO of Sun, enthusiasm for where the company is headed.

Here are some opinions from analyst reports which were posted on Barron's Tech Trader Daily:

Richard Gardner of Citigroup believes Schwartz continues to adopt the view that Sun's decision to open source its entire software stack will drive developers and users to its platform(s), eventually creating opportunities to monetize R&D investments. Gardner agrees with the premise that volume drives value, but how much value, for whom and over what time period is still unclear.

Thomas Weisel analyst Kevin Hunt still has concerns regarding the "lackluster" storage business (tape market and integration of StorageTek), and as a result, maintains a Market Weight rating on Sun's shares.

Deutsche Bank's Chris Whitmore believes that Schwartz and his team are driving operational and product line improvements, but that this is more than reflected in Sun's shares. Whitmore believes Sun's operating margin goal requires double digit revenue growth through F09, and maintains a Hold rating with a price target of $5.50.

Goldman Sachs's Laura Conigliaro said, "There are significant execution elements to be hurdled and timing could be lumpy."

While analysts reports are peppered with optimistic caveats, they are few and far between. Also, analysts and investors are still questioning the reasoning behind the convertible bond offering with KKR.

Sun's stock has had a massive rally recently, it might be time to take some profits.