Sun To Detail Channel Program Changes

Over the next few months, Sun will detail the modifications being made to a number of programs. Some of those have been partially announced – a fact that has added to partners& confusion, said Bill Cates, director of U.S. Partner Programs for Sun. "We tend to be very open with our partners, almost to the point at which it can backfire on us," he said.

Programs subject to change include the Sun Fund, Sun Only, and Storage Elite programs, all of which have been well received by the channel, Sun's solution providers said.

Cates confirmed solution providers' complaints that, as of September 30, Sun will no longer accrue the 2 percent in soft dollar rebates it now offers under its Sun Fund program. Cates said the program has enough money in it to fund all the channel initiatives promised partners through Jan. 31, by which time the company will move to a new "op-ex" or operating expenses-based program.

The new Sun Fund program, expected to be in place early next year, will include new demonstration activities, training and demand generation efforts, such as channel-centric, on-the-air advertising, said Cates. Sun will also loosen restrictions on how partners use their accrued Sun Fun dollars, making it easier to promote Sun's new Opteron- and Niagara-based Galaxy servers, he said.

Sun is also re-evaluating its Sun Only program, under which solution providers commit to not selling products from IBM, Hewlett-Packard or EMC in return for an extra 1 percent rebate on Sun sales. The wrench in the Sun Only works comes by way of a new addition to the vendor blacklist, Network Appliance.

That&s because a large part of Sun's channel partner base also count NetApp as a major vendor partner. But after introducing a NAS appliance of its own, Sun this summer notified partners that selling NetApp could push them off the Sun Only program.

Sun initially offered its partners an additional bonus of 15 percent for NAS sales through June to get sales started, and now offers an 8 percent or 9 percent bonus through the end of this year. Even so, many solution providers are angry because Sun doesn't appear to realize the significance of NetApp sales to their business.

"That was terrible for Sun to do," said one Sun solution provider. "We waited five years for Sun to come out with NAS products. All the smart guys sell Network Appliance. It's foolish--Sun just came out with its own NAS. For a company that touts itself as the network computer company, how can they slam people who sell others' network-attached storage?"

Strategic Technologies, of Cary, N.C., is among the nine partners that risk losing its Sun Only status. Strategic&s CEO and President Mike Shook -- who described Sun as a terrific partner to for 18 years, and as channel-centric as any vendor -- said he hopes Sun takes a hard look at how it treats partners who depend on Sun.

"We have to be successful with Sun to survive," he said. "If we have certain niche products, Sun shouldn't consider it an issue of Sun loyalty. They could end up penalizing some loyal partners. And we are very loyal."

Sun is looking at changing its Sun Only program so that it is less focused on whether a partner sells competing products, said Cates.

Sun is also mulling changes to its Storage Elite program, which gives solution providers a bonus rebate of 3 percent on all Sun sales if at least 30 percent of those sales come from storage.

The Storage Elite program will evolve as Sun signs up former StorageTek solution providers who do not do other Sun business. For them, a metric that uses storage sales as a percentage of total sales doesn&t make sense, Cates said

Ed Gogol, director of enterprise systems at Solarcom, a Norcross, Ga.-based Sun solution provider, said he expects Sun to get more aggressive in moving its channel partners to sell more of its storage since its acquisition this year of StorageTek.

"Prior to StorageTek, it was not feasible to be a Sun-only storage player," Gogol said. "But when they bring the StorageTek midrange products into the mix, it will be a pretty complete solution."

Solarcom actually likes Sun's new NAS appliances for its cost/performance features, Gogol said. "But for customers with NetApp on the floor, you can't just walk in and change them to Sun," he said.

Douglas Nassaur, CEO of True North Technology, Duluth, Ga., has focused exclusively on the Sun platform for five years. And while Nassaur said he applauds Sun&s cracking down on solution providers that do not commit themselves to the vendor, he thinks Sun needs to show more concern for the channel in return.

"We used to count on Storage Elite and Sun Fund," Nassaur said. "Now the money is gone. We can't depend on margins. If we lose the rebates, we'll have to sell more services. But now Sun is pushing its services offerings."

What really keeps True North a Sun-only partner is the top-notch technology behind the vendor's products, said Nassaur. "It's been very good," he said. "but if it slips, we will probably no longer be a Sun-only partner."

Greg Stroud, vice president of U.S. alliance sales at Sun, is expected to address many of these channel issues next week during at Arrow Moca's Net@Work channel event in Santa Ana Pueblo, N.M.