HP has engaged in an aggressive marketing campaign targeting enterprise customers and partners of Sun Microsystems in an attempt to steer them away from Sun’s technology.
In a comprehensive seven-page document sent to potential enterprise customers and partners, the vendor detailed why it believed they should “re-evaluate the condition of [their] current supplier.”
The document is titled, Enterprise computing vendor perspectives: Is Sun a viable path going forward?”
“At a time when Sun is telling a story of future chip designs and yet to be delivered architectures, there are a number of things that raise serious questions about Sun’s ability to deliver on these promises,” the document states.
“I have never seen anything like it,” a customer, who works for a large service provider, said: “I can’t work it out — after the Compaq takeover HP was left with such a large market share. Either HP is trying to kick a man [Sun] while he is down or they are very scared about something Sun is going to bring out.”
HP representatives did not respond to ARN’s calls to explain the document.
Managing director of Sun Microsystems Australia, Jim Hassell, described the marketing program as “an unusual approach”.
“It is more aggressive than anything I have seen in a long time — and it is also very inaccurate and unsophisticated,” he said.
The marketing material attacks Sun on five levels.
It first attacks Sun’s financial viability – citing the company’s 33 per cent reduction in revenue between FY2001 and 2002, its 95 per cent drop in stock value in two years, the downgrades of major financial ratings firms, and the exit of important executives.
Hassell said Sun has cash reserves of US$5.2 billion and has reported 32 consecutive quarters of positive cash flow.
“The financial viability of Sun is a non-issue,” he said. “HP neglected to mention that in 2002, their revenue dropped 20 per cent, their profit dropped 427 per cent, they laid off 8000 staff, and they too suffered a drop in the value of their shares.”
The document then attacks Sun’s “unrelenting adherence” to the SPARC processor and Solaris operating system. “Sun is limiting your choice and flexibility with its sole focus on a proprietary architecture that is lagging,” the document states. “Don’t be fooled by the consistent architecture argument of Sun, intended to make you feel good about being locked into a proprietary SPARC architecture.”
“We spend twice as much as HP on research and development as a percentage of our revenue,” Hassell said in defence. “Our future is based on our IP — we are not going to give it away to Microsoft and Intel. That will just make us one of the crowd. If you give your intellectual propertty (IP) away like HP has, effectively you end up a distribution company. We are a computer company, not a distribution company.”
Hassell said that while Sun was protecting the intellectual property it had put into its systems (SPARC and Solaris), it was also offering Linux on X86 (Intel). HP, on the other hand, had pulled out of several of its own developments (such as its middleware) and would not support the technology it developed in the past.
The third argument is one of whether Sun can compete on price or performance with Intel and its Itanium processor. “When Itanium becomes the pervasive enterprise computing architecture, Sun customers will be locked into a lagging and proprietary SPARC architecture with no path to Itanium,” it states.
The document then lists several technical glitches discovered in Sun products, and claims the pressures being applied on Sun with regard to financial results, R&D cutbacks, layoffs and executive management turmoil will lead its products to become less reliable.
Finally, the material dubs Sun technology “an island” that cannot meet the needs of most data centres, due to its “adversarial relationship with Microsoft and Intel”.
Hassell said customers were being presented with a choice between a company that innovates in order to reduce cost and complexity, or a company that focused on reducing the complexity of the computing environment by “asking you to pay through the nose in having them manage your generic environment.”
“The whole computing space is becoming very competitive — spends are down and that is what drives things like this coming out,” he said. “I think we will win out on this because we are offering a different kind of value.”