GE Access Layoffs No Omen For Sun

GE Access, the largest Sun distributor, last week laid off 78 employees, or 13 percent of its North American workforce. The Boulder, Colo.-based distributor attributed the cutbacks to a sudden drop in revenue during September and a dismal short-term business outlook.

"My biggest concern is not a specific quarter. These [layoffs were not based on the quarter but are forward-looking for the whole IT industry. We sincerely hope we're wrong," said John Paget, CEO of GE Access.

The GE Access announcement came as MOCA, the other Sun enterprise distributor, opened its Net@Work Partner forum here, prompting many of the 450 solution provider and vendor attendees to ask what happened and to maintain that they've fared better.

"Our September was OK. It was not over the top. But our third quarter was up 15 percent [year over year," said Rich Severa, president of MOCA, an El Segundo, Calif.-based division of Arrow Electronics.

Likewise, Sun termed the quarter "fair," even though government sales were less than expected, said Gary Grimes, vice president of partner management and sales at the vendor. "We did not have great expectations for the quarter. We felt good channelwise until mid-September," Grimes said.

The slow economy may have had a greater impact on GE Access' financial results, since over the past two years the distributor has invested more in support programs, Sun executives said. "I have absolutely no concerns for their [long-term viability. They're part of the largest corporation on the planet," Grimes said.

Meanwhile, some solution providers said Sun sales were looking brighter. Steve Israel, executive vice president at New York-based AMC, said his firm has one client that purchased $1 million of an expected $9 million in Sun equipment this year but doesn't plan to spend the rest until the fourth quarter.

"We had a very good month. We had another customer that spent $1 million on Sun last week, and we expect to do another $3 million this month," Israel said.

Meanwhile, Sysix, a solution provider based in Westmont, Ill., last week made a bid to expand its Sun business by acquiring Diamond Micro Solutions, a San Leandro, Calif.-based infrastructure firm specializing in disaster recovery. The acquisition is expected to more than double Sysix's Sun business, according to Sysix CEO John Sheaffer.