Sun Reorganizes, Combines Server And Storage Groups

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The reorg was announced by Sun president and CEO Jonathan Schwartz via his blog, and discussed in a hastily-arranged news conference. It follows the latest round of layoffs, which Sun execs said was not tied to the reorg but which many in the channel believe stem in part from Sun's acquisition in 2005 of StorageTek.

Starting late last week, and continuing on into this week, Sun is laying off scores of workers, including some of its storage people, according to channel sources. Among the layoffs are 108 people in its Broomfield, Colo. campus and 21 people in its Louisville campus, according to news reports last week. The two campuses are scheduled to be combined into a single campus in Broomfield by December of 2008.

John Fowler, executive vice president of systems at Sun, acknowledged those layoffs in Monday's news conference, but said that they were part of an on-going workforce reduction and not related to the server/storage reorg.

"That's crap," said one Sun solution provider, who asked not to be identified. "Of course it's related to the reorg. I'm glad they're reorganizing to streamline and get the two groups together. But they have to be doing layoffs. They are combining two organizations."

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In addition to the layoffs, several legacy StorageTek personnel have left Sun in the past six months, which a second solution provider said is not necessarily a bad thing.

"Sun and STK had different comp programs," the solution provider said. "Some STK guys were making them numbers -- big numbers -- on consumables. They were driving Porches."

Both solution providers agreed the reorg is a good thing for Sun and its channel.

The second solution provider called it a smart move for Sun. "They do have different guys for each product line, but they should be under central control," he solution provider said. "After Sun bought STK, they had storage guys from STK, and some from Sun. So they had two different guys steering the ship. You can't do it that way."

The first solution provider also said the reorg is needed. "But it makes me wonder why Sun bought STK," the solution provider said. "They bought STK, and then decimated them. It looks like the entire storage thing will go by the wayside for Sun, as always with their acquisitions."

A channel source said that the old StorageTek campus in Louisville is being sold for $1 billion. That, plus the reorg, is the latest evidence that Sun never planned to do much with STK, the solution provider said. "They wanted STK for its F-500 customers and its land," the solution provider said, noting that the land sale brings Sun nearly one-fourth of the total $4.1 billion its paid for StorageTek.

Fowler said that Monday's reorg aligns server and storage and networking technology into a single group, a move that makes sense because the distinctions between the three technologies is decreasing over time.

As part of the reorg, customer-facing personnel including those involved with sales, services, and channels, will still talk to customers as if they are focused on storage or on sales. However, engineering and marketing personnel will be combined to work together on bringing new products to market, Fowler said.

Headcount and R&D spending are not expected to change as a result of the reorg, Fowler said. He said that the recently reported layoffs were put in place before the reorg, and are not related to the reorg.

Jon Benson, Sun's senior vice president of storage who going forward will report to Fowler, said not to expect any changes to Sun's partnerships, either with technology partners like LSI or Hitachi Data Systems or its solution providers, as a result of the reorg.

For instance, Benson said, customers can expect new products resulting from its LSI and HDS relationships in the next 12 months. "The [product] roadmaps are unchanged for storage and systems," he said. "But this positions Sun for the future as the market continues to evolve and we see customers evolve to take advantage of it."