What’s In the Stars For Sun?

MOCA president worries about double-dip recession in Sun space

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As an insider's game, distribution isn't known for producing many candid, frank executives willing to go on record with their concerns or opinions about key markets. MOCA president Rich Severa is a notable exception.

The head of the nation's second-largest distributor of Sun goods and solutions, Severa openly questions whether the IT sector is coming out of a recession. Speaking recently at his company's headquarters during a customer open house that drew high-level partners like Data Systems Worldwide and Avcom, Severa candidly talked about market softness and the potential for a double-dip downturn in the enterprise-market segment where Sun plays. He also expressed concern over Sun's struggle to get in front of momentum achieved by IBM and Microsoft.

Praise For IBM

In particular, he praised newly named IBM CEO Sam Palmisano for recent comments that IBM's franchise in IT services could grow dramatically with partners. "Sam showed he was a partner-advocate in a way that [former CEO Lou Gerstner never got close to. I thought some of his remarks were eyebrow-raising," Severa says. He thinks IBM's assertion that it could double its share of the IT services market through the use of partners was a bold statement.

In contrast, he says, Sun's messaging is not as clear, which frustrates him because he believes Sun still has the strongest channel in the business.

Recent sluggishness has led some to wonder what kind of guidance Sun will give when it next briefs analysts about market conditions. Based on what Severa has seen in the first few months of the year, a sober assessment may be in the offing.

While the company saw a seasonal spike in the December time frame, the hoped-for uptick in the Sun hardware economy has yet to materialize, he says. "The demand for big-ticket hardware items has slackened noticeably," he says.

One thing may help improve conditions in the Sun marketplace: the disappearance of weaker Sun players. Severa says that will help stronger partners who have long-term designs on the Sun market. But he's wary about activity in the low end, where Insight Services last month became a Volume Channel Provider (VCP) for Sun, joining CDW as a provider of entry-level servers, desktops and appliances to SMBs in the United States. It would be significantly challenging to the traditional Sun channel if those two resellers gain access to additional products in the Sun portfolio. Severa suspects that's precisely what these companies want long term.

Looking ahead, Severa hopes Sun can make headway in its competitive battle with IBM and Microsoft. One way, he suggests, is by improving its strategic position regarding Linux, which has offered stiff competition to Sun resellers. The concern now, he says, is whether Sun steps into the void around Linux and contributes some of its own source code from Solaris.

While Severa views Sun's recent Linux moves as a good thing, he hopes Sun adds detail to its announcements soon. If it doesn't, he thinks IBM "could do with Linux at the high end to Sun what Microsoft did at the low end with Java a few years ago, which was to hijack an open standard for its own benefit."

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