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Sun CEO: Street Misinterprets Exec Departures

NEW YORK -- Sun Microsystems continued to hog the spotlight at the Bear Stearns technology conference here Thursday with CEO Scott McNealy insisting Wall Street was misinterpreting the company's recent string of executive departures.

"Even with the management changes, the work chart doesn't change. I don't think people understand that the average tenure among Sun executives is 10 years. We're a simple business unit and we've basically simplified the work chart," McNealy said.

He seemed irked by the media's perception of the Sun's management structure, insisting the main players remained in charge of the company's key business units and even took a swipe at criticisms of his management style.

"The media paints me as someone who doesn't listen but, my board kicks my butt because I listen too much," he declared.

Much like outgoing president Ed Zander did during the morning session, McNealy's presentation was peppered with jabs at Sun's competitors, mainly the recently-merged HP/Compaq and Dell Computer .

"The airbags are deploying right now," he said, arguing that HP shouldn't be seen as a direct competitor. "We don't really compete against them, much like we don't compete against Dell. HP is getting out of the enterprise storage and software business, where we are seeing most of our gains," McNealy said.

"I don't compete with Dell. I'm not a grocery store for PCs," he added.

At another point, using statistics from IDC to show Sun was taking market share away from IBM Corp. , McNealy quipped: "This is not Carly math either, this data is from IDC," an obvious reference to the public battle waged by HP chief executive Carly Fiorina during the contentious HP/Compaq merger vote.

On Sun's head-to-head competition with IBM, McNealy insisted his company was gaining ground on Big Blue. "In the toughest pricing market, our gross margins are improving. I want to make it clear that, in a lot of market segments, we are actually crushing IBM."

He also took several veiled swipes at Microsoft including a response to a question about his motivation as Sun's chief executive. "I don't want the world to have to deal with a Control/Alt/Delete environment. That's huge motivation right there," he said with a big smile.

On Sun's financial targets, he would not be drawn into details. "We haven't changed our statements. You'll have to joint he conference call to hear more." The Palo Alto, Calif.-based Sun is projecting fiscal fourth quarter profit with revenues expected to improve over the $3.1 billion posted in the most recent quarter.

Despite four consecutive quarters of losses, McNealy maintained Sun took great advantage of both sides of the technology bubble of the mid 1990s. "We took bigger advantage of the bubble that anyone else. And, when the bubble popped, we managed it better than anyone else. Our team gets huge marks for being opportunistic on both sides."