Disappointing sales and conflicting business models between the vendor and reseller has led NSC to shut down its Sun Microsystem’s business unit, according to the communications integrator's managing director, Craig Neil.
NSC launched its Sun division in May last year, hiring 22 staff across Sydney and Melbourne. It was expected to generate $25 million in its first year but Neil said the business unit only did half that figure.
Sun was sold to Oracle later that year. By December 2009, the writing was on the wall as NSC told ARN it had let two of its staff go from the Sun business.
Neil conceded the company lost a significant amount of money on the Sun business and blamed bad timing for the division’s shortcomings.
“We hired the people and got it all going in the middle of the global financial crisis and then almost the day we started, Oracle announced it was acquiring Sun,” he said. “Most customers just froze and people waited to see what Oracle did and that took nine months.
“Sun went through a lot of changes and its numbers were down so we didn’t go in when everything was rosy and we suffered for that.”
Oracle’s channel approach and direct sales ambition for Sun also proved difficult for NSC.
“The Oracle model didn’t really match with our business model and didn’t really allow us to do our annuity business,” he said. “It was very limited in who and how we can sell.”
From the 20 staff left on the Sun group, eight will be made redundant while the rest will be integrated into NSC’s call centre and unified communications business. This is the integrator’s traditional line of focus.
All support agreements with Sun will be transitioned back to the company over the coming months. Projects that are in the halfway house will be deployed and handed back to the vendor as well.
“We’ve cut our losses and moved on,” Neil said. “We’ve learned a few things on the way, which is always important.
“We ventured away from our core business and this has occurred but we learned a lot about the IT sector so have now decided to put our focus back into UC and call centre products.”