Whether you’re with Big Blue or Sun Microsystems, you’re going to be facing the same tidal forces in the marketplace.
After a week as president of Sun Microsystems Canada in Markham, Ont., former IBMer Stephane Boisvert is helming an organization
into rough waters. IT spending is tight and a wave of cuts is coming from its Santa Clara, Calif.-based parent.
Last week, Sun Microsystems reported a first-quarter net loss of US$111 million on revenue of US$2.7 billion and said it will cut 4,400 employees in an effort to return to profitability by the first half of 2003. The cuts would be in addition to the 3,900 announced a year ago and includes 1,100 job cuts announced six months ago.
Despite this situation, Boisvert sees opportunities for Sun, particularly in the Canadian mid-market.</P
CC: Sun announced a week ago that it would cut about 4,400 jobs from the payroll. Could you tell us what impact this will have on Canadian operations?
Stephane Boisvert: It’s too early to tell, but we will keep it to a very minimal number. At the same time it will have no impact on our customers.
Let me step back and explain to you my understanding of the cuts. All of the vendors have gone through cuts, so we’re not isolated in that strategy. Sun had an infrastructure to run a US$20 billion company. Our goal in the current fiscal year is to be between $13 and $14 billion according to expectations on the street. So what we’re doing basically is bring an infrastructure to a cost that will support a $14 billion (company) infrastructure. At the same time it gives you the opportunity to look at areas where you could invest or divest and revitalize the troops and focus on the technology. We will be investing 12 per cent of our income into R&D in this fiscal year, which is very high compared to an IBM, compared to an HP and even an Intel.
CC: Your most recent position was with IBM, one of Sun’s biggest rivals. Why make the move to Sun and why now?
SB: (Sun Microsystems) is a very strong franchise. The number of Sun servers installed worldwide is quite significant – it’s over a million. They gained market share in the first half of this year. They gained market share last year… .We gained share significantly around the world in the past number of quarters.
What you realize is the customer satisfaction around the world is high for Sun. We have strong relationships with our customers, and we’re extremely focused on delivering quality products – server technology, workstations and software – and we do it very well.
I would say today there are three technology companies that deliver technology to end users customers – Sun, Microsoft and IBM. I’m very much an entrepreneur at heart, and Sun is a company where I feel that I will be able to leverage my own entrepreneurial skills within the company. I’m very happy to be part of this company now. They approached me a number of months ago now, and explained to me the current Canadian franchise, which is quite significant. There are roughly 600 employees and an end-to-end business. We have marketing, finance, legal, HR, professional services, support services, under one entity and they gave me the opportunity to be the leader of that group, which is quite unique and quite a privilege.
CC: What is your perception of Sun as an organization now and what opportunities do you see, particularly in the Canadian market?
SB: I’m getting into Sun when it’s difficult for any IT vendor out there. It’s difficult at IBM, it’s difficult at HP, it’s difficult at Microsoft and it’s challenging at Sun. We have a large number of customers in Canada, working with large corporations to medium-size businesses to small businesses. What’s on the agenda these days is, how can I cut my costs? How can I consolidate my environments? Who are the partners that can assemble together a solution that will provide a return in a short period of time?
CC: With IT spending tight, what compelling reasons can Sun offer enterprise customers to acquire and invest in new technology?
SB: We have had a number of successes around the world with server consolidation. We’re pretty good at this. We look at the different environments. We look at the ISV portfolio of a customer and we have a time that we can pull from in our global operation working with local partners, get a quick turnaround and consolidate a customer environment. That’s one example.
Another area that is quite interesting is edge computing and the Sun Ray technology. We’re getting some traction in the marketplace about this extremely lean environment. I know other companies dip into this environment, but the way we are making progress in education environments where it’s lean and challenging these days is quite significant. In Quebec we are making inroads with our Sun Ray technology in the private schools because it offers an environment with appliances that offer very low-cost access to computing technology to the student body.
If you looking the earnings of report last Thursday, we took the Star Office business from zero to US$5.8 million in one quarter.
CC: How does the Canadian enterprise market differ from that of the U.S.?
SB: The Canadian marketplace is quite interesting. Like any other IT vendors, we’re looking at where customers and clients are looking at managing their IT environments, where they are willing to make investment to lower costs. There are pillars in the Canadian industry like the banks, some of the manufacturing sector, and the media/telecom environment, and they are still very strong and they still invest in technology.
There is a very interesting mid-market opportunity we will go after.
I’m taking seriously what we call the mid-market, the medium-sized business. We have a very interesting value proposition for these customers. We are launching a Linux environment on the LX50, and there’s more to come.
CC: What role will your channel partners play?
SB: We have a superb channel strategy at Sun Microsystems, working with enterprise services providers. We’ll be announcing shortly what we call volume service provider (program) for the low end.