MOCA To Enhance Sun iForce Account Management Tool

The new features to the Sun Service Center within MOCA's existing Vortex tool are aimed at helping solution providers take advantage of delivering more services in conjunction with Sun, which is continuing its push to make services a larger part of its overall business, said Bill Page, executive vice president of the MOCA Division of Arrow Electronics.

In a meeting at Sun's San Francisco office Friday, Page, along with Sun Services executives, outlined how Sun has been working to differentiate its services offerings from competitors IBM and Hewlett-Packard.

Packaging services as SKUs that partners can offer is a big part of that differentiation, executives said.

"The Sun Services subset has become the fastest-growing subset in our Sun business [over the past several years]," Page said.

He said for the past 2 ½ years he has been responsible solely for managing the Sun Services business that goes through MOCA. "Sun Services is a full-time job," Page said. "The Sun Services business [at MOCA] was up 40 percent in calendar 2004 over 2003."

The updates to Vortex include tools that will help MOCA resellers manage different types of billing scenarios than the standard product sale, Page said. Selling services, particularly on a subscription basis, brings in revenue on an annuity, or recurring, basis, and that is different to process than one-time revenue, he said. MOCA is working to help partners manage this kind of revenue stream.

"One of the issues VARs face is they don't have systems, the data-capture to deal with annuity streams," Page said. "Well, Arrow does, and we can help them get through that learning curve."

Among the new features to Vortex that will launch Monday include a budgetary online quoting tool that enables MOCA resellers to manage and run their own quotes, while allowing customers to process multiple quote scenarios.

Also new is automated delivery of contract booking packages, which allows VARs to process Sun Services contracts and booking in real-time. Additionally, the updated Vortex will include a quote tracking tool that allow partners to better manage quote request for Sun Services transactions.

Sun has been at work on increasing its revenue from services over the past several years, and has released a host of new services in the past year. One of this is Sun Preventive Services (SPS), a subscription-based managed service that helps customer track the health of their IT systems to prevent future problems before they occur.

SPS was extended to support heterogeneous environments out of Sun's acquisition of managed services provider SevenSpace, a deal announced in November but which just closed on Jan. 10. SPS version 1.1, which partners can resell, rolled out last month, and Sun already has a large systems integrator partner in an SPS engagement with a customer, said Mike Harding, senior director of availability services for Sun.

Sun's goal with SPS, as well as other services, is to offer a standard model for how the service can be delivered by partners, and then allow partners customize the service as part of their value-add, said Don Grandtham, senior VP, global customer services.

"The business model [for partners] is taking the value of the standards package and applying value on top of that and then monetizing that [value]," Grandtham said.

Marissa Peterson, Sun's executive vice president of Sun Services, worldwide operations and customer advocacy, said that obviously Sun Services does not have the money or resources that the services businesses of HP and IBM have. To compete effectively with these larger entities, Sun has to be "a lot more clever" in how it positions and delivers services, she said.

A part of that strategy is to offer less complexity and more automation in its services so the margins for both Sun and its partners are higher, Peterson said.

"[Our services] will be technology based vs. people-based, so they should be a lot lower cost," Peterson said. "Inside of Sun from a business perspective, it should be a lot more profitable, because the service-delivery cost should be a lot lower."

Because of efforts like these, Sun is seeing gross margins on services that are at least 10 percentage points higher than the margins competitors are getting, Peterson said, and Sun plans to take those margins even higher.

"You will be seeing how this is generating fruits for Sun," she said. "We intend to make that gap widen."