Sun Plans Changes To Education Channel Program

Sun Microsystems

Sun acknowledged it had formed the task force after CRN learned that one of its campus reps, Central Data, Titusville, Fla., was terminated from the commission-based program last week.

A Sun official called the termination an isolated incident and not related to as-yet-undetermined changes to its partner program for the education market.

The termination, nevertheless, caused some Sun campus reps to express concerns that Sun may be planning to take several large accounts direct.

"Campus rep" is Sun's term for partners who act as representatives for Sun in the education market, earning commissions as opposed to taking title to hardware and software.

Sun plans to unveil its new program for the education market July 1 and will make sure it has a partner model in place able to serve education clients, said Joe Hartley, director of the U.S. education market for Sun.

"There are around 4,000 universities and colleges, 17,000 school districts and 98,000 schools out there," Hartley said. "No single company can cover them all. The only way we can serve them is to have partners."

Part of the task force's charter is "to improve the coverage of the education market in the U.S. so that our customers and partners are better served as part of an overall go-to-market strategy," Hartley said.

Sun on May 13 sent a letter to Central Data terminating the campus rep relationship, but not its status as a Sun solution provider.

Hartley said the letter was an isolated incident, noting that the company has about 50 campus reps, and that the turnover rate for such reps is under 5 percent. He would not disclose reasons for removing Central Data from the program, saying it was a private matter.

The letter, however, infuriated Grady Crunk, executive vice president of the $63 million solution provider, who noted that it came less than a month after Sun's iForce partner summit, during which the vendor apologized for taking so much business direct during the dot-com boom and promised to be more partner-friendly.

"They apologized for screwing us, and they make it up by screwing us again," Crunk said. "I really don't know what to think. It's like learning the man you've called 'father' all these years is not really your father."

Among Central Data's Sun education accounts are some of the largest schools in central Florida, including the University of South Florida with its H. Lee Moffit Cancer Center, the University of Central Florida, Rollins College, Ringling School of Art and Design, and Brevard Community College.

Crunk said he stands to lose at least $7 million in hardware sales and at least as much in related services. He said Central Data cannot compete with Sun's direct-sales force because its termination as a campus rep means it will lose its "campus account" status, which entitles the solution provider to an 8 percent discount on Sun hardware.

Central Data has about eight employees who currently focus on Sun accounts, Crunk said. He said he will have to realign those positions unless Sun changes its mind.

Crunk said about six years ago he shifted his education clients from IBM to Sun after IBM's account reps tried to take the business direct. Crunk said he fought back by investing hundreds of thousands of dollars to hire and train Sun engineers, and he said he quickly won back every account because of his company's deep client relationships and strong service record.

IBM reps, Crunk said, still call him, offering all kinds of incentives to win back the business. After receiving the letter from Sun, Crunk said it may be time to return those calls.

Regardless of what he decides to do, Crunk said his relationship with Sun would never be the same because of the way Sun terminated his campus rep status. He said that just before Central Data received the termination notice, during the week of April 22, Sun told Central Data that it was receiving a new education representative and asked the solution provider to introduce the representative to its major education accounts. Central Data obliged, only to receive the termination letter in May, Crunk said.

Crunk also said no one at Sun called to inform him about the termination, but just sent the letter.

"It's not like programs haven't changed or vendors haven't screwed us before," he said. "But it seems like so much arrogance to not let us know what's happening. Not even a phone call or a 'thank you for all you've done for us until now.' But I'd still be mad anyway."

Other solution providers expressed concern about the way the campus rep agreement with Central Data was terminated, and said they hope it indeed was an isolated incident.

One Sun solution provider said that two of the three top universities in Florida are direct Sun accounts. The third, the University of South Florida, which was working with Central Data, will be a test of how committed Sun is to the channel.

"If Sun takes it direct, it's a big concern," the solution provider said. "But Sun may give it to another VAR. Or it could take the account direct, but give other education accounts to VARs."

Another solution provider and campus rep for Sun said he was nervous about the situation. "But I'm not convinced I have any reason to be nervous," the solution provider said. "There may be local issues involved, and not anything to do at the management level. I've seen concern that Sun has some interest in a more direct model. I've shared my concerns with Joe [Hartley, and he has listened."

At April's iForce summit, Hartley said, he spent half a day presenting proposals for changing the way Sun works with the education market. Since the presentation, Hartley said he has received a lot of input from solution providers about how it should work with partners in the education market.

"Our goal is to improve the value proposition with the channel and make more of this business indirect," he said. "We want to serve our [education customers and make sure they have the right partner set to succeed."

The solution provider who expressed concerns to Hartley said the new program outlined at the iForce presentation, if done properly, could be a positive move for both campus reps and solution providers in general.

"I'm comfortable with it," the solution provider said. "They will open up to more VARs and put them through specific training for the education market. Of course, it's a potential disadvantage to campus reps like me. But we are comfortable with our skills.

"If there are no campus reps in the future, I don't know if I can afford the skills to work in the education market as a VAR," he added. "But that's not one of Sun's proposals."

Crunk said the new education program, according to his contacts at Sun, involves Sun taking all the big accounts, handing each channel partner 10 accounts of their own, and opening the rest up to the channel in general.

"Sure, it opens up to the channel," Crunk said. "But what do you get? A bunch of small education accounts where Sun finds it hard to penetrate."