Sun Partners Say Pact, Changes Good For Channel

Sun's choice of a new president, its decision to make a deep cut in its workforce and its imminent acceptance of a $1.6 billion payment from rival Microsoft to settle long-running patent and anti-monopoly issues could be the boost Sun needs to get back on track, especially in terms of focusing more on the software market, solution providers said.

The payment will also help cover Sun's expectations of a loss of $750 million to $810 million for its third fiscal quarter ending March 28, 2004.

The most exciting part, according to Rob Wolfe, president and CEO of AvcomEast, a Silver Spring, Md.-based Sun solution provider, is that Sun and Microsoft are putting their whole war aside.

"They're going to bury the hatchet but compete fiercely based on their own merits," Wolfe said. "It's time for Sun to focus on Sun's business and not worry about what the other guy is doing."

While it's true that Microsoft or its Chairman and Chief Software Architect, Bill Gates, may not be the butt of one of a Top 10 list from Sun Chairman and CEO Scott McNealy, McNealy can now offer new Top 10 lists, including "Top 10 reasons why CIOs should look at Sun" and "Top 10 reasons why AMD is good for Sun and the entire industry," said Wolfe.

Tom Kuni, president of SSI Hubcity, a Metuchen, N.J.-based Sun partner, said the moves were long overdue. "It's time the companies stopped making the lawyers money," he said. "Scott took the Microsoft thing as religion."

Kuni, who has long called for Sun to cut personnel to reflect its drop in revenue over the past few years, said it is too bad the expected layoff of 3,300 Sun employees won't happen right away. "That way, they could cut their losses before their fourth quarter, which would look better in the financials," he said.

Wolfe agreed Sun's upcoming reduction in personnel is huge and represents a big opportunity for channel partners. "If it's across the board, they will need to leverage their VARs even more," he said.

Microsoft's certification of Sun's Opteron and Xeon servers for the Windows operating system could also boost Sun server sales, said Wolfe. "Sun's Opteron-based server is the fastest Linux and Windows server box on the market from any manufacturer," he said. "There's no reason to go to Dell or Hewlett-Packard. Because Sun and Microsoft are burying the hatchet on operating systems, this frees up sales opportunities to customers who are not interested in Sun's Solaris platform."

As far as Sun's overall software move, solution providers were glad to see the two giants start working together but had somewhat mixed reactions about Sun's appointment of software guru Jonathan Schwartz as president of the company.

The two moves combined are a not-so-subtle message that software is important for Sun, said Wolfe. "It shows the commitment to Sun's intellectual property in the market, and it goes beyond Java to include Solaris," he said.

Kuni said the promotion of Schwartz shows Sun's commitment to software, as opposed to its hardware focus in the past. At the same time, he said the agreement with Microsoft "shows that Microsoft finally understands it's not the only game in town."

One solution provider, who asked to remain anonymous, said the promotion showed Sun's renewed focus on software, but he is not totally thrilled that the president's post is going to Schwartz.

"Sun has not been effective at getting Sun's software message through," the solution provider said. "Jonathan has been very positive at Sun. He has been the one with the [contrary] approach at Sun. But I'm disappointed Sun didn't bring an outsider in, get another pair of eyes looking at where it is going."