Sun's McNealy: SeeBeyond Deal Means Opportunities For Partners

In a brief interview with CRN Tuesday, the Sun CEO said Sun Professional Services' web services practice and vertical groups will work with large systems integrators such as Accenture and with iForce partners to seed SeeBeyond's Integrated Composite Application Network Suite deeper into the marketplace and into Sun's installed base.

Although SeeBeyond works primarily with large enterprise customers, there are plenty of opportunities in the SMB market, said McNealy. "We'll definitely leverage the channel. That's how we'll get there," McNealy told CRN at a JavaOne press conference on Tuesday. "Those companies definitely need service partners more so than larger companies like JPMorgan.

McNealy said SeeBeyond partners will be folded into Sun's iForce partner program. The suite will be an integral component of Sun's Java Enterprise Server suite, and eventually will be integrated into Sun tools, Sun said.

SeeBeyond employs some 70 sales professionals. Sun could not say when its own sales force and channel partners will be authorized to resell and provide services on SeeBeyond's platform.

McNealy said Sun Professional Services will create reference implementations of SeeBeyond's ICANS platform for its systems integration and iForce partners. Meanwhile, SeeBeyond will train Sun's web services groups and its partners on its service-oriented architectures.

John Rymer, an analyst with Forrester, said there are many channel opportunities given that larger EAI companies such as Tibco and Webmethods as well as SeeBeyond primarily rely upon on third party services firms. It also gives Sun a viable response to Microsoft's BizTalk platform, he said.

"This fills a huge hole in Sun's software stack," said Rymer, noting that Sun quietly pitched a Sun-branded integration server it acquired but had few cutomers. This deal, the Forester analyst notes, will give Sun partners, such as Primitive Logic, access to SeeBeyond's advanced back-office integration, B2B integration, ETL master data management, business-process management, workflow, business activity monitoring, application adapters and graphical development as well as tools for composite application creation.

He added that the ratio of third-party services revenues to SeeBeyond's revenues is 70 to 1. "It's a big service opportunity," he said.

Jonathan Schwartz, president and COO of Sun, said at the press conference Tuesday that the company is wasting no time lining up integrators. "We'll have discussions with the largest SIs in the world within the next seven days, " Schwartz said. "Many want to partner with Sun because we're not in the services business per se. The customer wants a discussion between the technology provider and the provider of consulting services, and this is an ideal opportunity."

SeeBeyond's annual revenues stream is roughly $167 million. Of that, roughly between 40 percent and 45 percent are partner influenced sales and the remaining 60 percent to 55 percent of sales are sold direct or generated through large systems integrators such as Accenture and CSC, said Jim Demetriades, founder and CEO of SeeBeyond.

SeeBeyond anticipates it will greatly expand its footprint by exploiting Sun's sizable sales force and iForce channel partner base, Demetriades said, noting there are significant opportunities for smaller systems integrators and partners to sell to small and mid-sized customers in various industries.

For example, Demetriades said many medical firms are small and need outside integrators to help them implement service oriented architectures.

SeeBeyond currently has an installed base of 2,000 enterprise customers. The ISV lists large pharmaceutical companies as customers including Pfizer as well as large health care institutions.

One analyst noted that SeeBeyond is well established in Europe and recently beat IBM on a number of bids on IT projects as part of an overhaul of the British health care IT system, a massive IT project valued at as much as $18 billion, and in which Sun is participating.

"This gives Sun access to a sales force that can beat IBM," noted James Governor, principal analyst at Red Monk. He added that the the value of those SeeBeyond projects to Sun may exceed the cost of the transactions.