Sun Begins SMB Move, But VARs Worry About CDW Ties

However, some of those channel partners are expressing reservations about one particular plank of the new channel move: Sun's decision to name CDW as a preferred reseller.

Sun, of Santa Clara, Calif., on Tuesday unveiled an initiative to take its technology to companies ranging in size up to 1,000 employees, but not the small office-type firms, said Christine Beury, distinguished director of systems marketing for the vendor.

Part of the new channel push includes an on-line partner locator to make it easy for customers to locate either their current solution providers, or to make new solution provider relationships, said Cheryl Turja, director of Sun's US partner programs office.

Customers who do not have a VAR relationship can also buy direct from Sun, or can go to Sun's featured online reseller, Vernon Hills, Ill.-based CDW, Turja said.

Sun solution providers expressed mixed feelings about Sun having a featured online reseller, ranging from anger to hopes that they will soon have their turn to be a featured reseller.

One Sun solution provider, who requested anonymity, called Sun's move to declare CDW its featured online reseller ironic given CDW's acquisition in late 2006 of Berbee Information Networks, a VAR with close ties to Sun's arch-rival IBM, of Armonk, N.Y.

"With CDW's purchase of Berbee, CDW is a competitor to Sun," the solution provider said. "Berbee was a big IBM VAR, and had a big Cisco and Microsoft showing. So it will be interesting to see how Sun's lead generation program will work."

The solution provider said that CDW/Berbee's business includes IBM's System x and System p server lines, including AMD servers, making Sun's CDW relationship a big potential lead generation tool for IBM.

"It's another example of someone sitting in their ivory tower in Santa Clara, California," the solution provider said. "SMBs are the kind of customers with the strongest requirements for professional services. Here's what's going to happen. The customer will call Sun, or go to Sun's Website, and get sent to CDW. Then CDW starts selling VMware and other licenses. That hits the rest of us who sell VMware or other licenses and make money on the services."

Another Sun solution provider, who also requested to remain anonymous, said that competing with CDW is not usually a big issue. However, Sun's close relationship with CDW carries potential problems.

"We compete against CDW only for commodity products," the solution providers said. "Obviously, any time CDW is involved, I'm concerned. Sun often experiments with its channel programs at the VARs' expense. I don't trust CDW any more than I trust Dell."

Other Sun solution providers are willing to give Sun the benefit of the doubt regarding CDW, even going so far as to hope the CDW relationship will actually benefit other partners.

Andrew Kotarba, president and CEO of Dewpoint, a Lansing, Mich.-based Sun partner, said he is not bothered by CDW.

"I think I get what Sun is doing," Kotarba said. "As a loyal, dedicated Sun partner, I have an interest in their growing and gaining market share. I know they're trying to attack the void in their product portfolio. And as they invest in CDW, they're also investing heavy with me. I couldn't be more pleased with their program."

Kotarba said that it is important for Sun to establish an SMB presence, even if it means working with CDW to get the name out to smaller potential customers.

"We will benefit from greater market acceptance in this space," he said. "Sun doesn't have a lot of share here. We need to build more Sun presence in new customers."Sun is looking for CDW to fill a niche. I don't call what we do a niche. We put a lot of technical expertise around our offerings as well."

Mike Shook, CEO and president of Consonus Technologies, a Cary, N.C.-based Sun solution provider and managed services provider, said that CDW is a product fulfillment shop while companies like his are true solution providers.

"I wish Sun could have lead with someone like us, or another solution provider like FusionStorm, which adds value, as the featured reseller," Shook said. "A lot of resellers don't like CDW. But CDW doesn't add value. They don't come in with solutions. But Sun told us we will get equal time."

To the extent that the CDW name helps Sun create interest in smaller businesses that it had not dealt with before, other solution providers should not feel pain, said John Murphy, executive vice president of Advanced Systems Group, a Denver-based Sun partner.

"This is a market which is not that familiar with Sun, but which is obviously very cost-conscious," Murphy said. "If these customers are looking to buy products from a Website, they aren't my customers. If they are looking to get the right solution in record time, that's what we offer."

Murphy said he and his peers will be watching how the Sun-CDW relationship develops. "There'll be a lot of eyes on the CDW pricing," he said. "And there'll be feedback to Sun if it becomes a dysfunctional model."

Sun's Turja said that the CDW relationship is one that will help open smaller customers to the possibility of working with Sun to the benefit of all the vendor's channel partners.

All solution providers will have the opportunity to compete for this business, Turja said. "All our partners are referenced at the pull-down site," she said. "All partners have the opportunity to utilize all our programs, including rebates and deal registration. We don't anticipate our partners saying they can't take advantage of the programs."

Turja also said that CDW will not get any special pricing from Sun distributors including Avnet Technology Solutions, of Tempe, Ariz., and the Enterprise Computing Solutions Group of Arrow Electronics, of Englewood, Colo.

Beury said the new Sun initiative includes making available a wide portfolio of Sun products, including the company's x86-based server line, its entry-level SPARC processor-based servers, its entry-level StorageTek arrays, and virtualization technology from Sun and VMware, of Palo Alto, Calif.

More important, Beury said, Sun is providing those products as part of a series of complete solutions channel partners can take to their customers, including solutions built around Web virtualization, server virtualization, MySQL, SQL Server, Oracle Server, and Exchange 2007 migration.

"These are all solutions based on the research we've done that shows what Sun can offer to the SMB market," she said.

Sun acquired open source database developer MySQL late last month.

The move fits Sun's overall growth plans by expanding into the small and midsize space it previously did not serve well, said Turja.

To work, however, Sun realizes it needs to engage the channel, Turja said. Towards that end, the company is adding an on-line partner engagement and lead generation program, along with white papers and other materials to help customers understand Sun and what it can offer them.

Sun's SMB push makes a lot of sense, said Consonus' Shook. "If they are going to be successful, they will need a partner strategy, and will need partners who can build solutions," he said. "Things like the ability to consolidate server environments, build database solutions, and work with Exchange are important. If I take what Sun is doing with e-mail optimization, and combine it with the archiving capability of Symantec, I have a real neat solution."