Sun, EDS Hope Partnership Will Grow Markets

Sun and EDS announced on Monday a plan to work together to create a roster of complementary IT solutions, including Web site management, datacenter outsourcing and ASP hosting services, in an effort to grow the markets of both companies.

The partnership, dubbed the "Continuum of Services" program, is targeted at the Global 500 customers most traditionally catered to by Plano, Texas-based EDS. This will give Sun, which had a large proportion of its customers in the dot com space, a useful avenue into old economy businesses.

At the same time, EDS gains "a platform it thinks can service the full customer base in the long run," says Carrie Lewis, an analyst at the Yankee Group. "It's a land-grab time for companies like EDS, and Sun is seen as a key to help with that."

"If we can put together the right set of services in a packaged form, we can drive it into the small and medium enterprise space," says John Wilkinson, vice president of EDS Global Alliances and Indirect Market Strategies. "We think we can do that better with Sun than with any other partner."

The two companies expect the partnership to result in $3 billion in future sales over the next five years.

The program will call for Sun to provide the hardware--including Sun Enterprise servers, StorEdge products, the Sun Open Net Environment (Sun ONE) architecture--and software technology like Java and iPlanet software. EDS will provide systems implementation, integration, consulting, outsourcing and other services.

"We want customers to look at this partnership and think, 'best of breed services and best of breed platform,'" says Darlene Yaplee, vice president of global integrators for Palo Alto, Calif.-based Sun. The agreement doesn't lock EDS and its customers into one vendor, maintaining a degree of flexibility while introducing Sun's independent software vendor partners to EDS' mix of partners, Yaplee says.

"Their business model includes no services, and ours includes no manufacturing," Wilkinson says. "There are no conflicts built into this relationship. The fit has been incredible, because we have a common market and a common foe."

That foe is IBM Professional Services, the largest provider of professional services in terms of staff and revenues.

Sun and EDS will also work together on development, promotion, marketing and other marketing strategies.

Already, the two companies have built testing centers to demonstrate to customers the viability of their combined solutions.

"This has been in the works for 18 months, and with the testing centers they have already taken steps together, which bodes well," says Lewis.

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