Sun Looks Beyond Enterprise Roots

The enterprise-focused vendor is steering its business into uncharted territory with a lineup of new server, desktop and storage products aimed at small and midsize companies. And while the strategy may be risky, it's a move that's long overdue, said channel executives.

"SMB was an area that Sun overlooked previously," said Tom Kuni, president of Sales Strategies, a Metuchen, N.J.-based solution provider. "There's nowhere for them to go but up. The best part is, they can only do it with partners."

By rolling out a range of smaller-scale computing products, Sun stands to broaden its field of customers and snag new clients, said Rich Severa, president of the MOCA Division of distributor Arrow Electronics.

"Sun is trying to do that incremental business and capture new users," Severa said. "They're trying to sell deeper into their existing business base and wider to users that have never bought Sun-branded anything."

GE Access grasps Sun's strategy as well as anybody, since the vendor's platform is the only one that it distributes. Sun's transition to the SMB space also means a change for GE Access, which now is gearing up to enlist new solution providers that serve small and midsize companies, said Anna McDermott, vice president of the distributor's Sun Business Group.

"[These are] not products for only Sun's traditional channel. Some will be sold there, but these are more suitable for open systems business," McDermott said, adding that small and midsize companies are a new market for GE Access. "We've chosen to be a mile deep and an inch wide with our partners."

In one sense, Sun has already been in the SMB space. Two years ago, it acquired Cobalt Networks, a maker of Internet appliances for Windows and Linux environments, for $2 billion. But Sun's new x86-based rack-mount server, the LX50, builds on that deal. Sun executives said that about one-third of the 1,900 solution providers worldwide that have signed up for the LX50 come from the Cobalt channel.

What's more, Sun executives said they're focusing on specific geographical areas and vertical markets as the company looks to recruit more LX50 partners. For example, to attract PC-type solution providers, Sun is lifting some of the requirements normally in place to become a Sun-authorized reseller, including SPARC training and certification, they said.

The LX50,the first Sun server based on an Intel microprocessor,made its debut in late August. The 1U servers, which are built by a contract manufacturer, come with 1.4GHz Pentium III processors. The maiden version shipped with the Sun Linux operating system and a bundle of Java 2 Standard Edition version 1.4, Sun Streaming Server, the MySQL open-source database, Web cache software and Apache Web software. Last month, a Solaris 8 version of the LX50 was released with a bundle that includes the SunScreen Firewall application, and next year another LX50 is slated to ship with Solaris 9 and Sun ONE software such as Application Server, Web Server, Portal Server and Directory Server.

In early September, Sun also refreshed its entry-level server lines with new processors and software bundles without raising the hardware's prices. The Sun Fire 280R server, aimed at the Web services market, was upgraded to include 1.015GHz UltraSPARC III processors and is now bundled with Solaris 8. It now includes Apache Web Server software and later this year is expected to be bundled with Sun ONE Application Server 7 Platform Edition and the Sun ONE Studio 4 development tool. It also can be licensed for Solaris 9.

In addition, Sun enhanced its Sun Fire V100 server by upgrading it to include 550MHz and 650MHz UltraSPARC III processors and bundling it with Solaris 8, Sun ONE Web server, Sun ONE Active Server Pages and Apache HTTP Server.

Sun then turned to the client side, unveiling an x86-based desktop PC, code-named Zebra, that runs the Linux OS. But instead of pitching the product in the PC space, Sun plans to sell it as part of a secure infrastructure bundle, tying multiple desktops to Sun software and the new entry-level Sun servers.

Neil Knox, executive vice president for volume systems products at Sun, said selling individual PCs isn't the vendor's sales model. "It's not where we want to go," Knox said. "If you want to buy a single server, that's OK. But Zebras travel in herds."

Finally, late last month, Sun followed up its servers with its first SMB-focused storage devices. The Sun StorEdge 3310, a 2U rack-mount array, can be configured with one or two RAID controllers as a JBOD (just a bunch of disks) device. Each case can hold up to 12 hard drives of 36 Gbytes or 73 Gbytes each. By linking three units together, the maximum capacity in 6U of rack space is 2.6 Tbytes, according to the company.

The new storage products are tailored specifically for the channel, Sun executives said. Reference configurations include attachments to the new entry-level servers, giving solution providers a complete server and storage solution for customers in Linux and Windows environments, they said.

In its plan to target smaller businesses, Sun doesn't want to become embroiled in the margin-crunching desktop war, Sun solution providers said. Instead, the vendor hopes that the introduction of its technology to smaller customers will sway them to consider higher-end Sun products. "As people get exposed to high-quality, entry-level products, the business will move upstream," MOCA's Severa said.

MOCA already has several hundred solution providers selling to small and midsize companies and plans to selectively recruit more, Severa added. However, someone looking to sell commodity products at a profit need not apply, he said.

"Those are the kinds of resellers who look for the lowest-cost systems, and that is not Sun," he said.

 Published for the Week Of October 14, 2002