Sun adapts for a pre-loaded future

Sun Microsystems is changing the way it markets its hardware, putting the emphasis on cost of ownership and return on investment...

Sun Microsystems is changing the way it markets its hardware, putting the emphasis on cost of ownership and return on investment rather than megahertz and gigabytes, writes Eric Doyle.

Clark Masters, executive vice-president and general manager of enterprise systems at Sun, admitted that the dotcom crash and the resulting slowing of sales has forced Sun to rethink its marketing strategies.

In an attempt to improve hardware sales, the company will be pushing its Customer Ready Systems (CRS), which appeared last May. These systems are supplied with software pre-loaded.

Masters explained, "We are changing the way we primarily do business. As opposed to selling components, you want to configure them to the customer's orders."

CRS currently only accounts for 5% of mid-range system sales but Sun plans to increase this to 70%-80% over the next year.

The company is also chasing business in new markets following a slowdown in the financial and telecoms sectors. Masters admitted that Sun had "over-invested" in these areas. He said new target markets will be government, pharmaceuticals, life sciences and retail.

The pre-loaded software gambit has received something of a knock, with Sun's long-time partner Oracle starting to push clustered Intel servers and Linux.

This has caused some strain between the companies, with Masters knocking Oracle chief executive Larry Ellison. He sees a vested interest in Ellison's push to decrease hardware costs because it would free-up money to invest in software and services.

"Is Larry the guy to figure out what the architecture is for the next five years?" Masters asked.

Ellison knows he can only push Sun so far because the company still generates substantial revenue for Oracle.

Sun's working methods may be changing but the company still sees itself primarily as a hardware supplier and plans to release a new range of servers based on the Sparc 4 chip during 2003.

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