Now a much humbler company, Sun Microsystems is out to show partners it's not going to become the next Digital Equipment Corp.—the once high-flying alternative to IBM that failed to change with the times and ultimately was swallowed up by Compaq Computer. Sun is about to launch a brand-new operating system, Solaris 10, that it believes will leave Linux and Windows in the dust from a performance perspective. Instead of trying to displace those two platforms, however, Sun's new Solaris will work with them. That's in addition to sporting a new platform and a revamped business model that should position partners to compete head-on against the providers of commodity hardware. All this and more is helping Sun get its house in order.
For example, Sun narrowed its losses for the quarter ended Sept. 30 and again showed positive revenue growth. The net loss for its first fiscal quarter was $174 million, down from $286 million for the same period last year. Meanwhile, Sun reported revenue of $2.6 billion, a quarter-over-quarter increase of 3.6 percent.
One reason for the turnaround? Humility. Just how humble is Sun? Consider its new president and COO, Jonathan Schwartz. In nothing short of a mea culpa, Schwartz has acknowledged some key missteps since the dot-com bust of 2000. "Our shelves, in all honesty, were empty," Schwartz said of the past three years at a launch event in New York. "We just didn't have much."
The humility, its dtente with Microsoft and a promise of interoperability, coupled with new wares and Sun's mindset to beat rivals like Dell from a price-performance basis, has customers and partners tuning in again.
"We're seeing a big, big mindset change from the CTOs with the customers we deal with," says Tom Kuni, CEO of SSI Hub City, Metuchen N.J., and president of Sun's VAR council. "The customers I'm talking about are the Big Boys on Wall Street—the most cynical customers of all."
Kuni says Sun also has heeded the concerns of partners—helping address profitability by increasing margin opportunity, encouraging its sales personnel to push services business to partners and addressing concerns of the company's long-term viability, which was an issue in helping seal deals. "Sun unequivocally has the best channel program in the industry," he says.
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