Sun Pulls The Plug On Tech Data Relationship, Retreats From Small Business

Sun and Tech Data discontinued their partnership about one month ago because it has failed to reach expectations, according to executives at both companies. Sun now plans to focus more on its enterprise customers, those with at least 1,000 seats, said Jeff Barteld, director of US channel sales at Sun, Santa Clara, Calif.

Nevertheless, Barteld wouldn't characterize the change as a complete abandonment of the SMB space, but instead sees it as a refocus of resources.

"It's a question of looking where we can sell the servers by the hundreds and thousands, not the ones and twos," Barteld said. "A question of where we focus our resources. I fully expect to do well in the SMB space where we have resellers focused on SMBs. But the existing traditional Sun base tends to be focused on the upper scale."

“We are mutually walking away and feel very amicable. This is not a messy divorce,” said Pete Peterson, Tech Data&'s vice president of systems product marketing. “It&'s just a situation where their business strategy changed. We saw growth in that relationship, but not at levels we both wanted and quite frankly anticipated when the relationship started.”

Sun and Tech Data announced their relationship with a highly-touted splash two years ago at its TechSelect conference. As recently as July 2004, Sun authorized Tech Data to sell additional products from the original pact. But Tech Data&'s sales of Sun&'s Java Enterprise System suite as well as four-way SPARC servers never took off, executives said. In November 2004, two Sun channel executives told CRN that new servers based on industry standard x86 processors from AMD would help the company capture share in the "volume" server market.

Barteld said Sun will continue to focus its server sales on its two existing full-line distributors, Access Distribution and MOCA, a Sun-focused subsidiary of Arrow Electronics North American Computer Products, which service primarily enterprise and midsize VARs.

One solution provider that bought Sun products through Tech Data felt the Clearwater, Fla.-based distributor did not stock enough Sun servers, which put Tech Data at a disadvantage compared to GE Access and MOCA. As a result, sales lagged and Tech Data had less reason to keep stock.

“Logistically, the two never really connected. Tech Data can&'t say ship 500 of those… and we&'ll see if resellers buy it. It&'s hard to get anything going that way,” said the solution provider, who asked not to be named.