Sun's Rekindled Star

Matthew Harris has witnessed both prosperous and lean times throughout his 16 years as a Sun Microsystems partner, but he's more optimistic than ever about the vendor's future.

Despite Sun's precarious slide in recent years, its fortunes--and those of its partners--appear to be on the rise. For the first time in nearly two years, the company announced a quarterly profit. Sun is aiming to bolster its operating margin from its current level of 3.6 percent to 10 percent by its 2009 fiscal year. It's gaining share at the expense of its larger rivals Dell, Hewlett-Packard and IBM in the market for commodity servers, an area the company barely had a presence two years ago.

January's pact with Intel, while not as historic as the Sun-Microsoft detente back in 2004, is a major breakthrough for Sun that will give its hardware and, yes, software, significantly more clout and potentially much greater breadth.

Like a growing number of Sun loyalists, Harris believes Sun is emerging as a strong and more diversified vendor. While that healthy prognosis is far from certain, here's the case of why Harris' optimism may have legs and the barriers that await the long-troubled Sun.

The company now bases its business on four distinct segments in what CEO Jonathan Schwartz calls the four S's--systems, software, storage and services. With it are strategies and products to drive all four as viable businesses. Harris likes Sun's new approach.

"I haven't seen as complete an offering as I do now in 2007 in the entire history that I have worked for them," says Harris, who is now the Sun relationship liaison at FusionStorm, a solution provider based in San Francisco and No. 183 on the VARBusiness 500.

That's exactly what Schwartz wants to hear. One year into his tenure as company chief executive, Schwartz frequently talks about the broadened portfolio that Sun now offers. With a core focus on the four S's, Sun is simultaneously rearchitecting its indirect sales strategy with its new global Sun Partner Advantage (SPA) program.

Sun last month promoted Bill Cate to lead the SPA on a global basis. His goal is to allow solution partners to profit from focusing on any or all of the four segments. "We are much more aligned than we ever have been with the business units," Cate says.

For example, if a solution provider chooses to emphasize selling large volumes of Sun's x86/64-based Galaxy servers running Windows or Linux, the solution provider won't be penalized for not selling Niagara systems based on its SPARC processor or for passing on Sun's Solaris OS. That's a major shift from the traditional model by which Sun rewarded partners based on how much of the entire Sun portfolio they sold.

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