Sun Terminates 84 VARs, One Of Whom Is Still Laughing

Carl Wolfston, director of Headlands Associates, a Pleasanton, Calif.-based Sun storage solution provider, got a notice of nonrenewal of his Sun contract in January, and has yet to stop laughing at how disorganized Sun was in regard to the action.

Wolfston, who considers himself one of the best storage solution providers in the San Francisco Bay area, contacted Sun about four years ago to discuss selling Sun storage.

This was at a time when Wolfston said Sun had almost no presence in the storage market. Since Sun did not have partners designated as storage resellers, Wolfston said Sun officials told him to sign up as a workstation solution provider in order to get access to Sun's storage products.

Within days of receiving the Sun letter canceling its relationship with Headlands, Wolfston contacted his MOCA representative, who did not know about the cancellation or why it happened.

The MOCA rep then called Wolfston's district Sun manager, who eventually called Wolfston. The district manager said he did not know who Wolfston was, and that he was cutting back on the number of VARs he was working with. "I asked him what about storage, and he said he has other VARs," said Wolfston. "I said, we want to work with you guys on Fibre Channel, an area in which Sun is very weak. He said he'd talk about it later. But I know he was brushing me off."

A friend at Sun eventually put Wolfston in touch with the channel manager serving GE Access and MOCA, who agreed Wolfston is the kind of partner the vendor needs. He referred Wolfston to a Sun storage territory manager, who said he could not endorse Headlands as a solution provider because it sold non-Sun products.

Wolfston said he and the channel manager discussed classifying Headlands as an ISV or a "storage influencer." "He said I am the kind of partner they are looking for, and we should talk again three months later," Wolfston said. "Last time someone from Sun told me that, it took six months just to get signed on as a Sun VAR."

Wolfston admitted he did not sell much Sun storage, but said that is because until recently Sun didn't have much of a storage offering. However, he said Compaq Computer fully supports him despite relatively small sales because Compaq appreciates the relationships he has with his clients. "It's my way to be able to help customers with their problems," he said. "Margins for Sun's stuff is worse than in the Wintel world."

Sun Vice President Gary Grimes confirmed that official termination letters to 84 solution providers went out about one month ago.

Grimes speculated that 25 to 30 of the 84 former partners went bankrupt or are having serious financial difficulties.

The action helps demonstrate how the dot-com downturn, in conjunction with the economic slowdown, has affected Sun's channel partners. "It [has had a huge impact on the company," Grimes said. "But it also had a huge impact on Sun as the [dot-com explosion came in. We got both sides of it. Some of our competitors never enjoyed the benefits of it because they just never got off the boat. We have suffered along with our partners in that space."

A small number of the terminations were due to gray-marketing activities, said Grimes.

For the remaining partners, it was a case of their not putting sales and marketing muscle behind the Sun products, he said. "It wasn't happening, whether it was chemistry or lack of interest or we were kind of a secondary line," said Grimes. "Maybe they had good intentions when they signed up with us and because the economy went south they didn't feel like they could invest."

Sun is also set to make a decision in the next several months on its strategy for a stepped-up attack on the SMB market.