Sun makes volume channel play

Sun makes volume channel play

Sun Microsystems Australia has launched a volume channel strategy – and aims to sign up 100 new volume resellers by Christmas.

The vendor, alongside distributor Alstom IT, has been working for six months on back-end systems and channel development programs to make a play in the volume channel.

Director of products and channels for Sun Microsystems Australia, Paul O’Connor said the company had been waiting to launch the volume partner program until its product portfolio had enough breadth to warrant it.

With several low-end x86 server products hitting the market, plus a Java/open source desktop suite in hand, and a low-end line of storage products, the vendor felt the time was right to go after this market.

Sun Microsystems has to date had three channel programs in Australia – Workgroup, Enterprise and Data Centre. All were related to specific, high-end products that required certification on the part of the reseller.

The company has now added a volume tier for its low-end x86 Xeon-based servers, its AMD Opteron-based servers, its Java Desktop System software and its low-end heterogeneous storage products (the 3000 series). Resellers need no accreditation, and can sign up with a convenient web-based contract.

“Sun globally sees the mid-market as an incremental billion dollar market,” O’Connor said. “Locally we see it as a $50 million opportunity for us within two years. We wish to have 50 [volume reseller] partners on board by the end of June, and 100 by Christmas.”

Already the company had received 35 applications for the program. Twenty had already been processed.

O’Connor said there was no specific size or type of reseller he expected, but he was hoping for strong geographic and solution-based coverage.

“Most resellers I would expect to have some kind of solutions focus,” he said.

When buying products from traditional volume hardware vendors, the more a reseller buys on an annual basis, the cheaper their buy-price becomes, O’Connor said.

Smaller resellers find it hard to compete and thus stay out of the hardware game.

It was these resellers that Sun wished to target, by offering a level playing field on price.

At the same time, O’Connor admitted that any reseller bidding for a major deal can rely on Sun for pricing support if it means being considered. “We will use all means possible to be competitive,” he said.

The volume channel strategy positions Sun Microsystems as a new alternative for those resellers selling commodity IT products.

“Those resellers working with your standard hardware brands – the IBMs, HPs and even white box guys, they often find it difficult to differentiate themselves,” O’Connor said.

“Your ability to maintain margins is directly related to how you can differentiate your solution," he said. "A differentiated bid will get a reseller on a short-list, if anything because you have a different story to tell."

Alstom has hired dedicated staff to expand Sun’s volume business, O’Connor said.

The distributor would add value to the Sun servers by bundling a variety of security and database software products, among others.

“Alstom IT traditionally had a logistics support role for our products, and 18 months ago we extended that relationship so that they could play a channel development role as well,” O’Connor said. “This is a natural extension of that relationship.”

He said that the appointment of more distributors is not on the agenda at the moment.

“Distribution is not a limiting factor for us right now,” O'Connor said.

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