Volume 4, Number 44 -- December 6, 2007

Sun Expands Startup Essentials Discount Deals Beyond the U.S.

Published: December 6, 2007

by Timothy Prickett Morgan

Server and operating system maker Sun Microsystems would love nothing better than to have another dot-com boom--although it would probably call it the Web 2.0 boom--to help it position and peddle its infrastructure products. But the dot-com boom is unlikely to repeat itself, since IT organizations, Wall Street, and investors have learned too much in the past decade. That said, Sun certainly benefited financially from being the default server platform for the dot-coms, and it is wise to try to establish its wares as a chosen platform for these new Web 2.0ers.

Sun launched the Startup Essentials marketing and sales program in November 2006, and it gives qualified, relatively small, young companies a chance to buy Sun's hardware and software at discounts in order help these companies get off to the right start in terms of IT as they establish their businesses. According to Sanjay Sharma, director of startups and emerging markets at Sun, about 1,300 companies have done the paperwork to participate in the program so far, and given the IT-intensive nature of service providers and Web 2.0-style startups, the vast majority of the engagements that Sun has had so far under the Startup Essentials program have been for these kinds of companies. Sharma says that about 60 percent of those participating in the program are service providers or Web 2.0 firms, with most of the remainder behind hosting companies, software providers, or some other kind of IT provider. To participate in the program, a company has to be less than four years old and have fewer than 150 employees.

The program got its start a year ago in the United States, which despite its economic issues is nonetheless a hotbed for Internet and business innovation. Three months ago, Sun expanded the program to India and China, and this week, it is being rolled out in the United Kingdom and in Israel--two companies that also have a large number of vibrant, young high-tech companies. "The idea is to go into countries with a lot of startup activity, lots of broadband Internet access, and a history of venture capital investment," says Sharma. So it seems reasonable that Russia, Brazil, and the Nordic countries might be next, given this criteria.

If Sun accepts your application to the Startup Essentials program, your company then has access to the latest Sun servers and storage for discounts that range from 10 percent to 15 percent on entry servers to as much as 50 percent on bigger pieces of iron that are, from a cash flow standpoint, simply out of reach for such small companies. Sun is also working with hosting providers to give participants in the Startup Essentials program access to Solaris server slices in hosted data centers if they decide that they do not want to support their own iron initially--or ever. (Sharma says that instead of the $200 per month rate that a typical hosting company might charge for a significant chunk of capacity, Sun can get the price down to around $50 per month.) Sun is also giving Startup Essential customers access to the full stack of Sun software as well as a set of open source programs that have been optimized for Solaris, such as PHP, Python, Perl, and Apache.

As part of the program, Sun gives participants unlimited technical support--and not just Web-based tech support, but access to the full range of Sun experts. These experts can help make technical buying decisions, business decisions--whatever. The idea is to help the business get off the ground and grow fast enough to need lots more iron--and a lot faster than they would be able to do it without Sun's help.

"This unlimited technical support is unique to this program," explains Sharma. "Startups are good at a few things, but because they tend to have few people, they cannot be good at everything."

Sun is, as you might expect, pretty optimistic about what the Startup Essentials program might do for its top and bottom lines in the future. "There's a lot of energy right now, and there is a lot of startup activity going on again," says Sharma.


Sun Chases Web 2.0 Boom with Discounts for Startups

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