Sun Backs Into the SMB Customer Space
March 24, 2008 Timothy Prickett Morgan
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Server and operating system maker Sun Microsystems is known for being a player in the data center, but its servers are not known to be popular among small and medium businesses. And Solaris, like Linux and unlike Windows, is not exactly known as an appropriate platform for SMB shops. But, with a new focus on SMB sales, Sun has committed itself to chase down the SMB customer base to peddle its entry servers, mainly because IT spending in SMB shops is growing a lot faster than spending in the big data centers where Sun is a player. Beep. Beep. Beep. Beep. The sound you are hearing is that of Sun backing its way into the SMB space, which it has been doing for a number of years, perhaps hoping that none of its competitors would notice. Perhaps not making a lot of noise because it really doesn’t have a platform product line aimed squarely at SMB shops yet. But with the adoption of X64 rack-mounted servers, affiliated storage, and a partnership with Microsoft that sees them working together and Sun as an official Windows OEM, Sun can now take a crack at peddling its wares into the SMB space. And because it also supports Linux on its “Galaxy” X64-based servers, for those SMB shops that are keen on Linux, Sun is also a perfectly viable option for customers who want to buy rack-mounted servers. Sun does not, of course, have a line of X64-based tower servers, which are the dominant machine form factor chosen by small businesses and the departments inside midrange businesses. A tower box is more or less the whole data center, and customers expect it to have enough oomph to support many types of work, connectivity to attach to one or more networks as well as to the Internet, and integrated peripherals for storing lots of data and backing it up onto tape. But, according to Christine Beury, director of systems marketing at Sun who is heading up the company’s SMB efforts, a number of customers are taking Sun’s X64 workstations, configuring them with minimal graphics and using them as tower servers. Which is a bit of a flashback for Sun considering that the way Sun became the default server for Internet-style workloads in the late 1980s and early 1990s (and thereby getting its camel nose under the data center tent) was when Wall Street firms and big banks started taking Sun workstations, flipping them on their sides, and stacking them up as a new thing called a “server” in their data centers to support Internet workloads. The focus on SMB shops this week is as much letting customers know that Sun has appropriate products for them. “A big part of this initiative is raising customer awareness about our multi-OS strategy,” says Beury. “We know that not everyone knows, for instance, that we are selling Windows.” While Solaris is not excluded from Sun’s SMB efforts, just as Linux is not, Sun is clearly and correctly focusing on the iron that it makes that runs Windows. And to help it get the ball rolling in its reseller channel, Sun is enlisting the efforts of CDW, one of the biggest resellers of IT gear to SMB customers, to help simplify the sales process for its X64 servers, Windows licenses, related storage, and other software and services. Sun is not, of course, a stranger to a channel strategy, with approximately 70 percent of its current revenues going through value-added resellers to get into customer shops. “People like the direct contact they can get with the IT manufacturer, but they like the quick turnaround they can get from channel partners,” says Beury. Sun is not just trying to peddle Galaxy machines to SMBs. The low-end “Niagara” Sparc T1 and T2 servers are also being pushed to SMB customers, and you can expect Sun to deliver new Sparc T2+, Xeon, and Opteron products soon that are suitable for SMB shops. Beury says that Sun is realistic about how its product line fits into the SMB space, and in many cases, Sun is more appropriate as a supplier to mid-sized customers, not truly small businesses that have modest workloads and that tend to use real tower servers. (Not just workstations without high-end graphics.) “It is not so much the size of the business, but the size of the workload,” she says. So Sun is really aiming at first at the “M” in SMB, which is still a pretty big target, and small startup companies with relatively heavy workloads, like Internet startups from a decade ago and so-called Web 2.0 startups today. Beury says that of the 8,500 free trials that Sun has done to date for its hardware under its try-and-buy marketing program, 70 percent of the people asking to kick the tires on Galaxy and Niagara servers were SMB shops. She adds that Sun has received over 2,000 applications from startup companies under its Startup Essentials marketing program, which gives startup companies deep discounts on hardware, software, and support and access to Sun techies if they are doing innovative things and need more IT than they can perhaps afford right now. This program is a bit like a business incubator, and it will be interesting to see if it leads to a big jump in revenues down the line for Sun. You can see Sun’s SMB products at www.sun.com/smb. 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