Sun Microsystems is piloting the development of its own hosting centres, which partners will be able to use to sell utility computing and other services.
Services revenue at Sun grew 11% from the third quarter to its fourth quarter, which ended in July, producing its first $1bn-plus (£555m) quarter.
Marissa Peterson, who heads Sun's services division, discusses some of Sun's strategies and plans.
What is driving this growth?
We have worked very closely with our sales force so that they think of services more and more as an integral part of the sale versus just an add-on. We are really focused on selling solutions, and services is kind of the wrapper that puts it all together. There is also phenomenal market growth in managed services. We have also been focused internally on reducing costs and new offerings.
What are some of your new business models?
Sun Preventive Services (SPS), which we announced in June, focuses on preventing problems and restoration. It is a holistic methodology of assessing risks in people, in processes and products. We assess those risks and mitigate (them) so we can prevent problems before they impact availability. If we can incent our customers to stay healthy, our support costs go down and their operating costs go down. We offer up to 20% off their support cost to incent them to remain healthy.
Unlike some other service providers, isn't Sun's focus on offering services that support only its own hardware and platform?
For SPS that is true. But for our overall support and services capability, we have been offering, more and more, the ability to support third-party equipment.
Are your managed services users primarily Sun shops?
I would still say primarily that's the case. But the year-on-year growth of third-party support has gone up 25%. I am certainly finding that there are plenty of partners out there that we can form alliances with, so we are able to offer the full complement of services. I do think heterogeneous support is the game-changer in this industry. But what's going to differentiate us uniquely is to really support Sun equipment better than anyone else. So that will be our lead strategy surrounded by heterogeneous capability.
How does your managed service approach differ from a full-blown outsourcing deal?
We want to offer value-add managed services, where a customer might, for instance, have a specific need for interim operations management of a new datacentre. We would work with them and also train them, if that's what they would like, so that in fact they are capable of taking it over.
In terms of managed services vertical industry support, where do you feel you are strong and weak?
We are very focused on financial services, telecommunications, government - those are probably our top three. And we focus on education as well. Certainly we want to go after manufacturing more. We have tried to get into retail and health care, as well as life sciences, but we have prioritised where we think we are the most capable and have the partnerships that we can build upon.
What are your plans over the next 12 months?
My focus has been on delivering new services and solutions. For instance, subscription models for IT services - you'll see us offer that more and more. We are offering a storage utility, which is a pay-for-use model. In our offerings today, we provide the capability via our partners where we actually put equipment in our partners' site and our partner meters and bill the customer for the specific utility. Going forward, you will see us offer different types of compute utilities - it could be Opteron- and Sparc-based - and we can probably make Sun Ray cycles available.
Will your partners continue to provide these utility services?
We will do it via our partners primarily, but we will be willing to host it ourselves on behalf of our partners. We're in the process of actually building some hosting capabilities so we can do that. We would host on behalf of the partner. The partner makes the sale and the partner may add value on top of what we're hosting.
Patrick Thibodeau writes for Computerworld