Colorado Springs – Sun Microsystems (NASDAQ: JAVA) has set an aggressive goal for itself as it strives to create a US$10 billion channel business. To get there, Sun has introduced its Partners First model and three new partner compensation offerings, which the company hopes will incent and motivate partners to go down market and reinvest in Sun’s business.
At last year’s New Frontiers conference, also held here, Tom Wagner, vice-president of North America Partner Sales Organization at Sun, said the vendor wanted to grow its channel business from US$3 billion to US$7 billion by 2010. This year, Wagner said the company is still working towards the same goal.
“Clearly, we have a lot of work to do,” Wagner said. “The strategy is clear. We have to take share away from the other (competitors) and leverage our products and lend them to growth markets.”
Wagner said of the total market opportunity that exists today, Sun’s addressable market opportunity is US$118 billion. In addition to that, there’s a US$35 billion dollar market opportunity for Sun to acquire new business. The vendor’s strategy is to further develop and grow accounts by extending its partner and end-user reach and fanning out, Wagner said. Currently, Sun operates in approximately 65 per cent of the channel mix globally. Moving forward, the company, he said, wants to double the size of its channel.
Going into the 2009 fiscal year, Sun has centralized its National Partner Organization to help make doing business with Sun easier for partners. Through the organization, all channel routes to market will be supported through a single point of contact. Wagner also said Sun has re-evaluated its go-to-market strategy by branding its channel coverage model as Partners First. The Partners First model includes areas around partner engagement, partner experience and partner compensation.
“We have to provide partners with a reason to want to go down the market and to reinvest in Sun,” Wagner said. “This will lead to organic growth.”
Making up the Partners First model are the Sun Portfolio and Territory tiers. For its Dedicated/Top level tier partners Wagner said the company is not changing how it runs its business. With Sun’s Partners First strategy, while everything is Sun managed, everything is sold through the partner community. The goal of Partners First is to transition deals that are currently going direct, over to Sun partners.
“We have to leverage the mass of (our partners’) businesses in order to grow our business,” he said. “The only way to grow this business is to engage (partners) early on in the sales cycle. We need partners to invest in coverage models that will go down market because we believe the opportunities are endless for partners who are able to do just that.”
Sun also realizes it needs to get deals off the street faster, Wagner said. To help do this, the company is making sure the partner experience with Sun is as seamless and consistent as possible. The vendor also announced the availability of three new partner compensation offerings which include its Sales Accrual Program, investment protection and a rebate on new business sales for partners. The Sales Accrual Program is a marketing program which allows partners to increase their marketing spend. Investment protection is a new business incentive that Wagner says will offer partners sufficient protection on the front-end as a point of sale incentive offering. Lastly, Sun will also be offering a rebate to its partners on any new business sales that they generate.
“We’ve made improvements on our marketing spend because we want to make sure (partners) are sufficiently supported,” Wagner said. “I encourage (partners) to engage with Sun sales and practices and to continue working with your Avnet teams. Plan to go get new business and leverage all partner advantage programs. I ask partners to trust us and go with us to help us restore this company to greatness.”
