Sun slashes server prices

Sun slashes server prices

Alongside a slew of new product announcements, Sun Microsystems Australia has slashed the cost of its high end enterprise servers by up to 40 per cent and offered additional training incentives to boost product sales.

Sun's server product manager Alec Cameron said two factors had attributed to the cost reduction. The first was the increasing strength of the Australian dollar combined with a weakening US dollar. The other - and more significant reason - was the fact the company over the last couple of years had managed to drive down its operating costs.

"We are more efficient in building products," Cameron said.

Server products in the enterprise range include the Sun Fire 3800, Sun Fire 4800, Sun Fire 6800, Sun Fire 12K and Sun Fire 15K. The heavy discounting, up to 40 per cent on some of these models - applies to those servers fitted with 1050MHz SPARC processors. The newer 1.2Ghz models will be discounted about 25 per cent, Cameron said.

It will be a case of bad luck for customers who recently bought the Sun Fire products as they will be exempt from the discounts. However, customers that have yet to have their server orders fulfilled will be eligible for the discounts.

“I think Sun has always had a keen eye on the market and is looking at ways to drop its prices,” Sun Microsystems partner director, Paul O’Connor, said. “This will make the technology affordable for a large number of people.”

O’Connor said Sun’s resellers would now find that they were far more competitive on price.

“They can also go back to customers who could not afford the solution and tell them that they can now,” he said.

Lower prices did not necessarily equate to lower margins, O’Connor said.

He was of the opinion that the price reductions would actually create a more even playing field in the Sun channel.

“My experience is that it will be margin-neutral because many partners may have discounted these products in the past to be competitive,” he said. “This announcement will bring the channel equilibrium again.”

Alongside the reductions on the Sun Fire server range there would also be an across the board reduction of about 3.7 percent on all Sun products, software and services.

Customers - who take up one of the offers - will also receive training credits from Sun valued at one per cent of the purchase price. Backdated to January 1, end users will be entitled to an education voucher worth 1 per cent of every dollar they spend on a Sun kit.

This was in addition to the free training Sun provides for its reseller partners, O’Connor said.

“Education is too often an area that gets squeezed in IT budgets,” he said. “These vouchers will be a strong selling point partners can go to customers with.”

(Howard Dahdah contributed to this article.)

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