Sun Adding 1,900 Partners to Its Base

The new partners, hundreds of which are expected to be based in North America, will give Sun enhanced market penetration in market segments and customer accounts underserved by Sun's current base of partners, Sun believes. Many of the new companies, for example, already focus their energies on network edge-type devices similar to the new LX50, which Sun unveiled on Monday.

The new one and two-way LX50 servers feature an x86 architecture and can be powered by microprocessors from Intel or AMD, a departure from Sun's previous strategy. The servers will come equipped with both Sun's Solaris operating environment and an enterprise-ready version of Linux. Prices for a single-processor unit start at $2,795, and $4,295 for a dual processor unit. Among other things, the new servers will ship with a complete stack of software products, including Java 2 SDK Standard Edition, Sun One ASP for Linux, TomCat, MySQL, Apache, Sendmail, Bind, Sun Grid Engine and Sun Streaming Server.

Hooping to limit Microsoft's penetration into enterprise Sun accounts, Sun has taken the unusual step of recruiting significant numbers of new partners to help blunt Microsoft's advances. But that will almost certainly increase the potential for intra-channel problems within the Sun community. Despite this, Sun's volume product executives believe the potential benefits the newcomers bring more than offset the downsides that increased channel conflict may create.

To maximize the opportunity with this product, Sun needs volume channel experts, explained Peder Ulander, director of marketing for Sun's Volume Systems Products Group. According to Ulander, 30 to 40 percent of the channel partners who sign up to carry the new LX50 are likely to be existing Cobalt resellers. The balance, however, will either come from the ranks of Sun's existing Channel Development Partners (CDPs) or from the base of channel companies worldwide who do not currently compete in the Sun market. At present, Sun has created a new portal where potential partners can sign up to resell the new LX50, Ulander said.

While a potential boon to these who have been locked out of the Sun world, the addition of several hundreds resellers is not likely to be met with much enthusiasm by existing Sun partners. For starters, existing resellers believe there are already too many partners in the Sun community, the weaker of which are believed to be contributing to ongoing price erosion with sell-at-any cost practices. Existing partners are also worried that the new Sun partners could dilute the perceived value of Sun certifications. That's because newer partners will only be required to meet a relaxed set of criteria in order to resell LX50 products. Finally, existing partners worry that new partners will try to expand their access to Sun products once they get a foot in the door. Already some who signed on to carry the Cobalt products have done just that, thanks to a new Sun pilot program under way.

The pilot project has given certain newcomers the rights to sell a limited set of SPARC products in addition to the Cobalt products they already sell. These same companies could gain the rights to resell Sun LX50s, too. Insight, for example, is currently selling a limited number of SPARC-based Sun servers, and Flare Networks, a hosting and managed solution provider based in Fort Collins, Colo., has access to some, too.

Sun continues to study its options with regards to adding another broadline products distributor, as well. However, Sun has not made significant progress that it is ready to report at this time, sources both inside and outside the company said. One senior-level distribution executive who has discussed picking up the Sun product line described the talks as "unproductive." One reason: an inability to settle on financial terms. The distributor believes Sun is not putting enough margin in the deal for third parties to justify their participation

"Every time we get ready to dance, Sun changes the music," said the executive.

Despite this, sources inside Sun said the company is still actively involved in reassessing its go-to-market strategy. According to Neil Knox, executive vice president of Volume Systems Products at Sun, the LX50 opens up new volume-based channels as well as opportunities for Sun's own direct sales force.