Sun Microsystems is setting an ambitious goal for itself: the vendor wants to grow from a US$3 billion channel business to a US$7 billion channel business by 2010. And that’s just a brief pit-stop, Sun executives say, on the way to US$10 billion.Speaking at New Frontiers, the annual conference for Sun partners organized by value-added distributor Avnet Technology Solutions, Sun laid-down its ambitious goal and asked for the channel’s help in meeting it. Tom Wagner, Sun’s vice-president of Americas partner sales, said growth has now surpassed making money as Sun’s top priority.
With Sun feeling it now has the best product and solution portfolio it has ever had, Wagner said weaving Sun’s products and solutions together with its partners’ ability to build solutions and add expertise will be key to the success of Sun’s growth strategy.
Going-forward, Sun will be speaking with its partners to see how much business they think they can do and what investments they’re willing to make, add it all up to see how far they are from the US$7 billion goal, and work with partners to develop a plan to get there.
“We’re heavily channel-focused and channel centric,” said Wagner. “We’re not getting requisitions from the board of directors to go build-out a more extensive direct sales organization, that’s just not in our DNA.”
Sun and the channel
Today, Sun does 65 per cent of its business through the channel, and while Wagner said he expects that figure to climb closer to 70 per cent Sun is focusing on real, organic growth, and not just re-routing direct business through the channel.
“That’s not simply share-shifting,” said Wagner.
“This is about creating a much bigger pie for the company. As a company we need to grow, and one of the central ways we achieve that growth is through the channel.”
During New Frontiers, Sun announced the launch of a new program to help drive that growth, the Partner Growth Fund.
The goal of the program is to get demo equipment into the hands of Sun partners, who can then get it in the hands of potential customers to help make a sale. Partners will earn dollars every month based on their revenue that can be used to purchase equipment that can be used for in-house demonstration centres, proof of concepts and other uses.
A similar program was actually cancelled by Sun three years ago for budgetary reasons, forcing Sun partners to purchase demo equipment out of their own pockets, and Sun said partners have been asking for a similar program to return.
“We’re in a position now where we can bring that program back to the market and our partners, and we couldn’t be more excited about it,” said Wagner.
Cheryl Marfia, director of U.S. partner programs for Sun, added with the absence of a demo program Sun wasn’t always the leading technology or the one that was discussed in the account first.
“When you can put that technology in front of the customers, its sold,” said Marfia. “Now partners really get to focus on building-out their solutions.”
Sun has also introduced deal registration to complement its earlier program around teaming agreements.
Teaming agreements are more suited to longer-term relationships, and with Sun’s business focus shifting into new markets Marfia said it was time to offer deal registration.
“We’d felt that for the products we were selling at the time, and the types of customers we were selling into, the teaming agreements met the needs of what we viewed as our traditional sales cycle,” said Marfia.
“Now that we have products in our portfolio that go into different markets that are maybe more volume-based, it became readily apparent we needed to put a lighter-weight deal registration system in place.”The key motivation behind deal registration, added Wagner, is a recognition of the time, effort and investment that a partner puts into the sale.
Deal registration is currently only available in the U.S., but Marfia said Sun expects to expand the program to its Canadian partners by the end of the fiscal year. The Partner Growth Fund is a global program.
Bradley Brodkin, president of HighVail Systems, a Toronto-based value-added reseller and Sun partner, said the Partner Growth Fund is something that he and every Sun partner he knows are very excited about, and have been asking for ever since Sun cancelled the earlier program.
“We were very disappointed because we wondered how are we now going to buy gear, and we had to do it out of our own pockets,” said Brodkin.
The program will also allow HighVail to replace and upgrade its own internal IT infrastructure, as well as demo new Sun equipment to current and potential customers.
“We had to beg and borrow to get the gear we needed to do things like certifications, but now we can get that gear ourselves,” he said. “That program is critical.”
Brodkin added the expanded focus on teaming agreements is also important for HighVail. While he usually only partners with VARs he knows well, when working with a new VAR teaming agreements help to build trust and formalize the relationship to a greater degree, reducing risk.
Avnet preaches continuity
Before Access Distribution was purchased by Avnet Technology Solutions less than a year ago, Access was already the world’s largest Sun distributor.
Now, as part of Avnet, partners will also have access to Avnet’s practices with HP, IBM, Symantec and a host of other vendors.
The New Frontiers conference began with executive announcements that saw two familiar former Access faces taking leadership roles in Avnet’s Sun practice.
Mike Hurst will run the group as vice-president and general manager of Avnet’s Sun solutions group in the Americas. As well, Anna McDermott was appointed vice-president for Avnet Technology Solutions, Americas.
John E. Paget, president of Avnet Technology Solutions, global, and himself an Access alumnus, said the key message he wants to deliver to former Access partners is one of continuity.
“What’s important for the Access reseller to see is that the relationship they’re used to with Access is the same type of relationship that Avnet provides to all its partners,” said Paget.
“Avnet is a very high-relationship, high-value, high-touch kind of company.”
Now coming under the Avnet umbrella, Paget said partners will have access to a broader range of products and greater solutions and support, making it easier to expand their product offerings. As well, Avnet offers more robust financing offerings and strong support in specific verticals, such as health care.
Paget admits that the integration of the two companies has not gone as smoothly as it could have on the IT side, with the integration of the companies’ ERP systems proving particularly challenging. He said he’s confident however that the challenges are behind them.
“Selling Sun is a different rhythm than selling IBM or HP, so we need to make sure that the processes work appropriately, taking the very best of the Avnet tools and integrating those into the right processes,” he said.
Stepping into his new role leading the Sun solutions group, Hurst agreed the opportunities available now to the firm’s Sun partners are much greater than what Access was able to offer on its own.
As part of General Electric, Hurst said Access was never seen as core to the parent company’s business, and GE wasn’t willing to invest in the division. Now, as part of a global VAD, Hurst said the opportunity for investment is there.
“Now we can invest in this business, we can invest in partnerships, and we can invest in partners, and in new vertical areas to accelerate growth for our partners,” said Hurst.