It's Time For You to Get Out of the Sun Market

What they don't realize is just what a mess the Sun channel finds itself in right now and how complicated it's going to be to fix. Rather than address these issues head-on and communicate the value of being a Sun VAR today, the company is sitting idly by like Nero fiddling as Rome burns.

But let's not get ahead of ourselves. Sun's channel policies and structure were idiosyncratic from the moment the company signed up its first reseller. It has gone from quirky to downright dangerous. Sun executives, and particularly those who run its channel, tell us that less is more. I could never quite come to grips with that philosophy, but reluctantly accepted it. Is Sun's problem today too few salespeople and advocates?

Most vendors want to convince as many partners as possible that their platforms are worth supporting and selling. But not Sun. Sun's universe was,and still is,a very defined one, if you believe them. Only a few select shops are financially fit to support the Sun platform, they would say. And believe it or not, I am starting to believe them. Why? Well, I believe that less is going to amount to more headaches for Sun. And I would derive some kind of twisted satisfaction from it were it not for the pain of great solution-provider organizations who made the mistake of betting too much on Sun.

Let's look at just how dire the situation is and why, if you sell Sun today, you should be looking to make investments in other technologies or shift to other platforms immediately.

We've chronicled the bankruptcy-protection filings and closures of several prominent Sun integrators in recent months. That's a significant trend every Sun reseller should be studying because more are coming. Just pick up the phone and talk to any nervous Sun VAR, and you'll hear stories about several colleagues teetering on the edge of financial disaster. The most recent one to fall was Infinite Technology Group (ITG) of Mineola, N.Y., a major Sun VAR whose sales peaked at $80 million a few years ago. Today, its sales are closer to $20 million. Its executives boasted of great relationships with Sun's distributors and executives. ITG made a good impression and possessed a strong knowledge of the market. As a result of its reliance on Sun and, to be fair, pressure from more macroeconomic issues, it became burdened with $12.7 million in debt and has only $5.2 million in assets. That, obviously, is not a healthy ratio.

While ITG toils in bankruptcy court, Sun is making some questionable channel moves. It recently authorized a New York firm that has a reputation as a gray marketer, and it's focusing on large global systems integrators at the expense of mainstream channel partners. VARs are losing sales to gray marketers after completing design work, only to be told by a customer it can get the hardware cheaper elsewhere. The most controversial of all moves had to be authorizing CDW and Insight as partners.

As if things weren't complicated enough, consider that VARs long dependent on Sun have little to invest in marketing the line. Are you starting to see the vicious cycle here? What little capital they have is tied up in ensuring survival, not promoting Sun, which has yet to help these organizations market the value of those expensive servers or Cobalt boxes. Meanwhile, the Sun channel is bleeding engineers. Many solution providers are laying off the lifeblood of the Sun channel,the systems engineers who help design and build Sun server and storage networks. One of the reasons is the high cost of supporting those individuals. Those engineers won't be supporting Sun in their new positions. Sun's partners must invest millions to support the Sun line, so many are shifting those dollars into non-Sun activities.

Clearly, there are no easy answers. Maybe we'll have to settle for one of the tired jokes [CEO Scott McNealy carries around. Or maybe, better yet, the solution is selling something besides the Sun brand,like IBM or HP Unix offerings, or an Intel-server running Linux. Let's see how funny Scott finds that.

Let me know what you think of Sun. Is there a fix? Contact me at [email protected].

See how readers feel about Sun's channel.