Share… (Gaining)

For those that missed it, definitely worth reading:


Sun Gains Share in Q1.


Innovation takes longer to deliver than a simple price cut, but if Q1 is an indicator of things to come, has more lasting value as a competitive weapon. For our customers and our shareholders. To be perfectly clear, lowering price is a tactic at Sun, not a strategy.


I was asked yesterday why we’re gaining share – I said three reasons:


1. Solaris and Java are gaining momentum

No one can possibly dispute the impact free and open source software is having on the world – as the OpenSolaris and OpenJava communities continue to expand, as downloads and adoption increase, so does awareness of Sun’s (and other open source community member) offerings and the total revenue opportunity. We gain share when customers deploy apps built on our platforms at a rate exceeding others. When our customers grow faster, so does our share – of licensed software, services on free software, servers and storage.


2. Galaxy, Niagara and Panther*


This one’s more obvious – customers prefer our products when they’re faster, draw less power and take up less space than the competition. World records help. But it’s the total equation at this point – the “performance at any price” mentality is fading fast: just ask a Web 2.0(TM) startup what portion of their operating expense goes to electricity – you’ll be stunned.


3. Sales and Service Execution

I was talking to a customer yesterday, one of our largest, and asked “how are we doing for you?” I presupposed the answer would surround our product roadmap, given how much time we’d spent getting them up to speed on where we’re headed. The response had nothing to do with our products – their CIO just said, “your team is doing great for us, we love doing business with them.”


When it gets right down to it, especially for our largest customers, people buy from people.


So congratulations, folks – well done, across the board.


______________


* those are code names for internal server projects, and I just earned myself some hate mail from the product groups that want me to stop using project names…

20 Comments

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20 responses to “Share… (Gaining)

  1. And there is a large community of people that are porting everything open to Solaris x86 and Sparc. The open source software stack at Blastwave is now past 1500 apps and they are all SVR4 style packages for Solaris 8 and 9 and 10 and upwards. This means that a Solaris users can run any piece of x86 hardware ( Sun or IBM or HP or even Dell ) and have an application stack that will rival Red Hat AS. So what I am saying is Solaris Everywhere running on Anything is possible and that means PowerPC too. Any day now.
    Dennis Clarke
    http://www.blastwave.org/

  2. Regarding the last section about the products and the people, I think it’s exactly what software should be like: solving a problem for a customer. Pay for the service those programmers do for you. See software engineers as people who can help solve a problem. Pay for that service, not for the software itself. That’s how everyone designing open solutions can compete with proprietary solutions, where it’s rather a “bulk offer” targeted generically than to one customer, right?

  3. Want to grow more?

    I thought Sun was all about the internet, and how the internet and Sun wants ends the digital divide, Well store.sun.com is falling down on the job, Sure its a great solution for the united states customers, but the rest of the world is stuck going through resellers that mostly refuse to talk to individuals. My friend Dan in London, UK is having a very hard time trying to upgrade his old Sun server, a Sun e5500, to a new galaxy box, you can find his complete story in the links below. You make a big deal about how “Developers don’t buy things,” perhaps it’s too difficult to buy through Sun, if they aren’t in the U.S. and they are smart enough to realize that the resellers are ripping them off and refuse to pay the extortion. Dan didn’t want a big discount he just wanted the prices quoted on the uk.sun.com site. When he tried the new “try and buy program” he was given a list of 5 resellers, 3 refused to talk to him because he wasn’t a company, the others, refused to sell him the configuration he wanted unless he paid huge fees for assembly, surely a person that can administrate a Sun enterprise 5500 server can install a dvd drive? They also wanted to charge him a credit card handling fee of 10%.

    Sun really needs to open store.sun.com to the world, or follow Apple’s lead and open brick and mortar stores so people can get the equipment they need, not just individuals but small companies as well the ones that don’t have Sales reps begging to sell them equipment. The two groups that are currently having a hard time buying your hardware. If people can’t buy the boxes, how can you expect to increase your sales?

    Perhaps you could even use your existing Sun offices as store fronts and get Sun products to the people. Sun Ultra 20 and 40’s are awesome systems that run Windows, and Linux as well as the obvious Solaris. They are faster than what Dell and others have, why not get them out to the people.

    Links to Dan’s story:
    Sun resellers hurting Sun
    Latest from Sun resllers
    No Discount

  4. Bharath R

    Couldn’t agree more with James Dickens. Go direct sales, Sun!

  5. Akhilesh Mritunjai

    Hi Jonathan,
    Congratulations for the stunning (relatively) growth this quarter. Being a SUN fanboy for long, its soothing but still not satisfying, and would like to ask how in the current scenario where server market is stangnating, and enterprizes are gearing more towards server consolidation and virtualization, do you see oppurtunity for your gear ?
    And secondly, how do you plan to take on IBM ? Their sales reps eat yours like popcorns.

  6. I agree 100% with James on the store.sun.com comments. The site is horribly slow and makes it a pain to try to buy direct.

    I recently purchased a Sun X2100. The buying process was cumbersome, and the fact that the machine shipped in 4 different boxes seemed a bit wasteful. On the other hand, the price was great and machine seems very well built. Just make it easier for people to get the machines.

    Sun really needs to make it easier for folks to buy direct. While some may say that developers don’t buy things, the fact is that developers, engineers, and sysadmins are usually the ones that *fight* for certain technologies and eventually sway management on purchasing decisions. If these grassroots folks can’t buy direct without major hassles, how can they recommend purchasing Sun hardware to others?

    -M

  7. Alex Lam

    Interesting to present me with a more powerful desktop than the Prescott that I’m using at the moment?
    I really think that Solaris, with JDS, can offer me a comfortable environment compare to Windows XP Pro which I’ve been sticking to. I also believe that the UltraSPARC systems should prove to be more powerful and scalable for my applications to run upon.
    However, all I can see in the catalogues are choices between Intel, AMD or an occasional Apple. Where’s Sun?

  8. Torbjorn Kristoffersen

    I understand exactly what you mean James. I’m in Norway and I pretty much went through what Dan is describing. The resellers I found were absolutely terrible at customer relations unless you are a “respectable” company, I suppose.
    Granted, the Sun resellers feel they should prioritizing the bigger customers, and there’s sense in that. But a simple solution would be to bring a simple store.sun.com service to Europe. Do what Apple did, let the arrogant local resellers feel some REAL competition!

  9. Michael van der Westhuizen

    In partial response to/inspired by James Dickens…
    While I am not familiar with the Sun store, I feel that Sun’s channel hurts them in many ways as well.
    By this I mean that, as a developer working in an organisation with a Sun support contract I have had nothing but atrocious service and response times from our (paid, expensive) Sun support.
    That said, I’ve had unbelievable response and feedback from Sun’s FREE support offerings (forums) – I’ve been provided with workarounds, had issues investigated and got solutions FOR FREE, and in less time than it took to get an entitlement code for Sun Update through our official Sun support channel.
    All in all, I think that Sun needs to examine its channel very carefully – in some cases the channel is not living up to the standard Sun is setting.

  10. Another vote for James Dicken’s comment regarding the sales channel model. Having used various resellers over the past years I find that most of the time they are frustrating to work with and add very little if any value to a deal. In fact here in Singapore I would say they add negative value due to inaccurate quotations and frequent misunderstandings. Obviously margins must be too little for them to put in people who can offer both knowledge and service. The solution (internet global sales) also seems obvious, at least from my point of view…

  11. Peter Firmstone

    Good to see the Sun beginning to rise on a new era of computing. It’s a credit to those making it happen.

  12. Prince

    Good to see SUN is growing shares. Great products alone are not the success story, there should be efficient means to sell the products too. Is there a Linux port available for UltraSparc T1 based servers. I bet SUN will likely see more sales for energy efficient niagara servers once linux is available on them.

  13. It’s warming to see how Sun has quietly digged into more wide computing area with java than MS has. Java starts from enterprise application servers and goes into mobiles (and JavaCards!). Most modern phones support java but very few work with MS products.
    What Sun misses is software development above development tools. Are there strategical reasons for this?

  14. Dave

    Jonathon,
    Thank you for expanding the context of this blog, and for acknowledging that growth is the result of technology innovation, devoted employees, and contented Sun customers. One can always debate the relative merit of each factor, but no one can dispute that success comes from a satisfied, well serviced client writing a cheque, with Sun’s name on it.
    While dark times may be upon us, Sun’s brilliance will ultimately be sourced from the infinite fuel… your people and your technology vision. Put your trust in those employees who maintain thier integrity during difficult times, and especially those who live and share Sun’s vision with your customers.
    Above all, continue to listen to those customers who challenge you to be better, for it is in thier wisdom that Sun’s radiance will glow upon your shareholders and the world.
    Dave

  15. Great job team Sun. Nice answer for the next time someone asks how you’re going to make money…
    I am definitely with James Dickens though. Its no good blaming European labour market inflexibility for issues, if you won’t give European customers what they want. You have channel issues in the US too.
    Its surely time to find a way to treat smaller firms as valued customers, in order to drive long tail opportunities.

  16. Just to add closing comments to the very valid points raised by James – I have managed to sort Dan with a machine (just awaiting confirmation on the delivery dates), so with luck he should be a happy puppy shortly.

    Resellers/Partners/VARs aren’t all bad, and it’s not all our fault – I have had disappointing experiences getting information and details from Sun and the UK distributor (I’d love to try and put more push on the Sun Ray range) and, sadly over the past year I have not had one automatic referral, so it saddens me to hear of your poor levels of service.

    Still, it’s great to see Sun making progress, they have great products with excellent quality and good prices.

    I try to provide good service and good prices to all my customers – we’re not all bad news!, it’s a shame people report bad experiences, our Sun affiliation means a lot to us, I want to be associated with a market leader known for their quality and reliability – I’d hate for that to be withdrawn because of other companies (much larger companies I hasten to add) providing poor service.

  17. Anantha

    I’m with most other comments regarding the Sun online store @ http://store.sun.com. It is the slowest and most cumbersome eStore I’ve ever navigated. If Sun intends this to be a showcase for the capabilities of the hardware & Java (on which it is based) all I can say is that they’ve failed miserably. I’ve seen lot of other, busier, sites that are Java based that ‘fly’.
    I challenge you Jonathan to use the Sun online store and contrast that with the ease and performance of Amazon.com (I’ll admit there isn’t much configuraton on that site for products) or Dell.com. I admit that online store isn’t for ordering a complex server for E25K but it should fly for most of the servers.
    BTW, why don’t you just sell pre-configured items on eBay like you did before? At least the buying process is less painful.
    I’m an avid Sun fan having worked at Sun in 1990 when SparcStation launched.

  18. Carolyn A. Colborn

    “Project names” are intriguing to me. Star Kitty, Kitty Hawk, and Tango all have special meanings to me, circumferentially, tangentially, not related to Sun, and related to Sun’s projects, all at the same time.
    I’ve often wondered why companies do this, but never asked the question. The ones I notice are delightful names, tantalizing names, and for whatever reason their name was chosen, in my opinion, it is not my business, unless I have responsibility for the project.
    I figure it is one of those things left for inquiring minds to wonder.
    P.S. Congrats on the server marketshare!
    cc

  19. Sun UK sell a limited product set online direct to the customer. See http://uk.sun.com/store

  20. There must be some concern about the future of so many projects in flight with a RIF of up to 5,000, per an AP story of 5/31/06?

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