Sun Microsystems has an unusual problem on its hands. Brilliant billionaire Andreas von Bechtolsheim, Sun's co-founder and achief scientist and highly regarded systems designer has announced plans to leave the Silicon Valley networking giant to join a startup he founded, Arista Networks, as its chief development officer.
The announcement has led to a flurry of reports that Bechtolsheim had resigned from Sun, something the systems and software company strongly denied. It blasted an e-mail to reporters Thursday morning, calling the reports inaccurate and saying that Bechtolsheim will "continue his present involvement" with Sun, albeit on a part-time basis.
However, Arista didn't take this lying down. Mark Foss, Arista's director of marketing, said in response to Sun's e-mail that "as far as we're concerned" Bechtolsheim is working full time for Arista. "There's a miscommunication between Sun and us," he said. "We're working with Sun at the moment to clarify the situation."
Bechtolsheim has now clarified. In an interview on Thursday he confirmed that he works full time at Arista, where he is also chairman and cofounder, but that he'll continue to advise Sun on a part-time basis. "That's the legal status," he said, adding that he'll work for Sun "no more than one day a week."
Bechtolsheim features on the Forbes list of the 691 richest people in the world, ranking 620th with a net worth of $1 billion. He had been Sun's first employee, ahead even of co-founders Scott McNealy, Vinod Khosla, and Bill Joy.
Bechtolsheim co-founded and co-funds Arista with Stanford professor David Cheriton, a longtime associate, who will serve as its chief scientist.
Arista puts 10 Gigabit Ethernet into a tight package and sells it not only as a way to connect rack-mount servers, but as a way of creating enterprise cloud computing centers. But it's not just betting on hardware packaging. Bechtolsheim is a full systems designer and pushes on the software front as well.
Cisco switches and routers dominate the industry and the Internet, but Bechtolsheim points out in talks and interviews that they are run by monolithic software systems, with as many as 20 million lines of code. Arista is staking its reputation on an Extensible Operating System.
Sun has had enough bad news this week already, which could explain attempts to play down the departure of Bechtolsheim, who is also one of its founders. Last Monday Sun warned it would report a big loss for the past quarter on declining revenue, which sent its already-flagging stock price lower. Then on Wednesday Sun's largest shareholder said it would take a more active role in the company to help maximize shareholder value.
The shareholder, Southeastern Asset Management, hasn't said yet what it plans to do. Analysts say possibilities include trying to sell off some hardware assets, making changes in senior management, or making Sun a private company, which would relieve pressure to meet quarterly earnings forecasts.