Sun's Channel Chief Pledges 'Better Value Proposition' For Partners

In the wake of Sun Microsystems' just-announced sales reorganization, Greg Stroud, the company's vice president of iForce partner sales, has his hands full getting the channel up to speed on the changes. He's also poised to work with Sun's new Client Solutions Organization to help VARs field a host of cutting-edge offerings ranging from Java connectivity applications to utility computing services.

Most important, Stroud will be leading the channel leg of Sun's efforts to reshape its marketing focus from one based on technology into a more customer-centric, solutions-oriented message. He took time out from Sun's recent blizzard of announcements to talk with VARBusiness about his plans.

VB: What are your objectives for Sun's partner programs?

Stroud: Our goal is to create a three-legged stool of direct sales, solutions and partners, with which we'll build our go-to-market strategy. From a partner perspective, I'll be working on the industries and markets that Richard [Napolitano, the new head of Sun's U.S. Geographically Established Markets group] wants to attack and invest in. I don't expect a huge change in our current strategy. We're going to be developing programs for partners and solutions with our client-solutions organization, to really go out and execute in the marketplace.

VB: How will this work organizationally?

Stroud: The architecture is fundamentally around our Relationship Sales Organization (RSO)--that's going to be the key engagement point for our partner community. We're going to be working with Chris [Ostertag's Client Solutions Organization] to embed partner content into the solutions that we're putting into the market. We'll also be working wherever possible to make sure our partners have the ability to implement Sun's offers and solutions.

VB: What's the structure of the new organization?

Stroud: I am aligned at the U.S. level, working for Richard Napolitano, who is the senior vice president and head of our U.S. Geographically Established Markets group. Tim Lieto is running sales. I'm running partners. We both report to Richard. A client solutions vice president for the United States, [who is yet to be hired], will also report to Richard.

At the global level, Bob MacRitchie is the executive vice president of Sun's Global Sales Organization, Clark Masters is running verticals, Chris Ostertag is running global client solutions, and a [person yet to be hired] will run [worldwide] partners.

VB: When we spoke last summer, you said that Sun's direct sales force is going to focus on the Fortune 500, but Sun's partners aren't restricted from selling into those accounts.

Stroud: I don't see a change in this. We run an open channel model, which means that partners can participate in our largest name accounts as well as midsize businesses.

VB: Which are the target markets you're going to focus on?

Stroud: Fundamentally, Sun is going to be focused on the medium and large businesses. As the partner chief, it's my job to create an economic model on which partners can make money, that aligns with the needs that Sun has and the direction Richard decides on.

I would expect that short term, there isn't going to be a big impact. We've already said that we want to create a better value proposition in the enterprise midmarket. The targeted account rebate program (TARP), which we've had in place for a year, is doing really well. We're looking at maybe refreshing it and making it a little more exciting. We're also looking at incremental businesses that we can create through the Solar Edge Elite Program, which we introduced in [December, to spur partner sales of Sun's Opteron-based systems]. That's really going to be catapulted forward, as we get Solaris 10 in the marketplace.

In software, we're going to be taking subsuites of our Java Enterprise System [JES] stack, focused on communications, Web infrastructure, high availability, identity management and applications [development and deployment]. We're going to create partner programs around them.

VB: Sun's indirect sales are currently between 51 percent and 60 percent of total sales. Will they stay at that level, or, as you become more solutions-oriented, will that figure increase?

Stroud: I've been talking to the partner community about what the sources of gross margin are going to be in the future. I see four sources. There's the hardware gross-margin capture from transactions--selling our hardware or services. Source No. 2 is gross margin associated with selling Sun intellectual property (IP) into the marketplace. Obviously, the expectation should be--and there is--more gross margin in selling Sun IP than in selling naked Opteron boxes.

No. 3 is client solutions. I look at this as a large, potential gross-margin opportunity for our partners. We're going to build that with our Client Solutions Organization.

The fourth area is in the Sun ecosystem. We're going to be very focused on building adjacent market strategies for our partner community with application partners and people who are embedding Sun IP as part of their offerings. That's the notion behind Network Connect and Partner Connect, which are two programs that we just introduced over the past 90 days. Network Connect is [the program that supports the] marrying up of our distribution channel with our ISVs. Partner Connect is marrying up our Relationship Sales Organization (RSO)--our engagement people--with our ISVs.

VB: What would you say to partners who are worried about the investment in time and training they're going to have to make to get up to speed to sell Sun's new solutions?

Stroud: I think it'll run the gamut. If you take a look at what it'll take to execute in the Solar Edge Elite program [to sell Opteron systems], this is a capability that a lot of our resellers already have. If you look at Solaris and Solaris 10, there's already a lot of knowledge in the marketplace. Moving into new solutions is going to require more education, training and development. We're going to commit to having that available to our partner community.