San Francisco, Oct 03: Network computer maker Sun Microsystems Inc. should slash as much as 19 per cent of its work force and tighten its product focus or it could become a takeover target, an influential Wall Street analyst said. "Sun faces a crisis," Merrill Lynch analyst Steve Milunovich wrote in an unusual note to clients, which was in the form of an open letter to Chief Executive Scott McNealy and the company's board.

"On its current course ... Sun is likely to suffer further share and financial losses, become irrelevant to most users, and eventually be acquired for its installed base."
Milunovich, who rates Sun stock as "neutral," outlined several areas that the company could address, including cutting up to 7,000 jobs, spinning off technology such as its Java software, hiring a chief operating officer and giving McNealy "a make-over."

"Scott's brash and contrarian personality have been synonymous with the company's image and success," he said. "Unfortunately, the act is getting old."
"I've not heard back from Scott yet," Milunovich said in a telephone interview. Bureau Report