Sun to Form OEM Business Unit

Sun Microsystems is creating a business unit to support its OEM partners.

The group will include dedicated sales, services and support staffs that will deal directly with the OEMs, said Joe Heel, the newly appointed senior vice president of the unit.

Heel will have a budget and revenue account, and will answer directly to President and COO Jonathan Schwartz.

The Santa Clara, Calif., company will make the announcement on Feb. 8.

The continued migration in data centers away from proprietary hardware and software and toward more open and industry-standard products is opening up an opportunity to be more proactive with OEM partners, Heel said in an interview.

In addition, Sun’s history of not competing directly with OEMs also is important, he said.

“We help OEMs succeed, and don’t compete directly,” Heel said.

OEMs are a key part to Sun’s overall business, he said.

The company garnered $1.8 billion from OEMs last year, which accounted for more than 13 percent of its overall revenues, according to Heel.

In fiscal year 2005, which ended in June 2005, Sun reported revenues of more than $11 billion.

The business unit will include most of Sun’s key hardware and software offerings, including its servers powered by the company’s new UltraSPARC T1 chip—the T1000 and T2000 servers—its systems running on Advanced Micro Devices’ Opteron processors, its telecommunications products and Solaris 10 operating system.

Click here to read more about Sun offering a new UltraSPARC T1-based system on a try-and-buy basis.

Sun is taking is 20 largest OEM account teams—which account for about 70 percent of OEM revenues—and making them more focused globally than geographically, which the company feels will make them more responsive to the OEMs.

Support also will be improved, giving the equipment manufacturers faster access technical information, engineering support and loaner products on which to build their products.

On the service side, OEMs will have more direct access to top engineers, rather than having to first go through level-one support staff, Heel said.

In addition, the company also is forming the OEM Platform Group as part of this initiative.

Aimed initially at the telecommunications industry, the OEM Platform Group will deliver to equipment makers integrated offerings that include hardware, software, operating systems and middleware.

The group also will offer support for the computing stack, Heel said.

“The idea of integrated stacks exists in other industries, such as health care,” he said, adding that his plan was to start slowly to ensure that Sun can get the model down before expanding into other industries.

To read more about Sun and IBM targeting the retail industry, click here.

The program will cover a wide range of equipment makers, he said.

For example, 80 percent of mobile handsets are built using Java, so focusing on those OEMs is important, Heel said.

OEMs will see some of these benefits initially, but the bulk of the program will be rolled out by the end of Sun’s fiscal year, which ends in June, Heel said.

Charles King, an analyst with Pund-IT Research, said Sun’s focus on the OEMs makes sense.

“It’s a big business,” said King, in Hayward, Calif. “In Sun’s case, with the problems that they’ve had over the past few years, not only is it good to server the company’s hard-core customer base—and the telcos are certainly that—but there clearly are benefits in promoting the UltraSPARC platform and bringing people back into the fold.”

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