Sun Has Built A Channel Program That Resembles A Low-Flush Toilet

What I didn't know before I moved in was that the treehuggers and the politicians had gotten together before my new house was built and passed one of those "we are going to protect you" laws. Unfortunately for me, this law covers a proven and simple technology that used to work just fine but now no longer does,the toilet bowl. The legislation reduces the amount of water in the toilet tank by almost 50 percent to conserve H2o. The problem is, when it's time to flush, you often don't get the desired result. So, you wind up flushing two or three times and wasting more water. Thomas Crapper's invention no longer works very well.

What does this anecdote have to do with high technology? Lots, when you look at Sun Microsystems and its approach to solution providers and the channel in general. In my opinion, Scott McNealy and crew are not committed to the channel. They will tell you they are, but that's just marketing hype.

McNealy's recent interview with CRN (April 15) revealed the flaws in the company's strategy. While Sun is secretive about the exact number of solution providers in its arsenal, it works with roughly 400 on the hardware side and 400 on the software side in North America. About 30 percent of its business moves through solution providers. With 800 players,probably more like 600 when you consider overlap,there just isn't enough force behind Sun's channel program. Yet, McNealy said in the CRN interview that Sun will use solution providers as "the Army, Navy, Air Force and Marines."

Let's think about that for a minute. Two of Sun's fiercest rivals long-term are IBM and the merged HP-Compaq. Both have tens of thousands of solution providers. If I were you, Scott, I'd be praying they don't invade.

Of course, because it works with such an anemic number of solution providers, Sun can claim its channel has fewer margin pressures. Most of its partners are understandably happy, given they have few competitors within the Sun network. But the business climate and the fact that Sun's rivals are doing a fine job of leveraging their channels to capture market share could change that scenario.

Look at it this way: Microsoft has a much larger, well-oiled partner corps and is looking to do to Sun what it did to Netscape, Borland and dozens of other has-been companies. HP and IBM have so many channel partners that it's obvious they can service a much larger customer base. IBM said very clearly at its channel conference earlier this year that it is gunning for Sun and believes its partners will help get the job done.

Without question, Sun's competitors have their own partner problems. But they also are staffed by individuals who believe in the channel and understand how to leverage solution providers to drive sales up and costs down.

Sun doesn't have that. Its top managers, including McNealy, are not fundamentally committed to leveraging the channel in a meaningful way. There is no strong voice inside Sun with the knowledge to challenge conventional wisdom or at least force an honest debate as to how the vendor should look at channels over the long term. Meanwhile, Sun has reported three straight quarterly losses and is probably headed for a fourth.

What we have here is a low-flush channel program that just may be the reason Sun goes down the you-know-what,if it doesn't fix its policies and fast.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].