Simon’s Blog

Sun Microsystems inc is now in real trouble - the company’s stock price continues to move downward at a seemingly ever-increasing rate.   It’s a shame - the company has amazing assets that, in the long term, could generate massive share holder value.   The company also has, thanks to CEO Jonathan Schwartz, a fabulous long-term strategy. However, there is now a pressing short-term problem that needs to be addressed if the company is to survive. The number one problem for Sun is the sales and marketing of its hardware. Quarter after quarter after quarter, the company has failed to increase its top line.  Despite the big problems with the global economy, the market for server hardware is plenty big enough for Sun to significantly increase its sales.  It’s now time to fix this problem.  Herewith, my 30-day plan for starting to increase the company’s top line.

Firstly, why isn’t Sun increasing its revenues?  The answer to that is easy - Sun’s sales team is a walking, talking disaster.   It will take time to turn that around, even assuming they have a credible plan of action (which they may, or may not have - the company is reported to be in the process of firing 60%-70% of its sales and marketing people - that could well be the right move, but the devil is in the detail on that).   I don’t believe the company now has any time left to fix their sales team.  So, what to do?  Here’s what I think should be the top three priorities for Sun Microsystems.

1. Offer Windows Server 2003 and 2008 out-of-the-box on Sun x64 hardware

Windows Server is probably 90% of the market for x64 servers.  Currently, Sun is all but ceding 90% of the x64 server market to its competitors.  Time to change that. Let customers buy a box from Sun with Windows Server (either 2003 or 2008) pre-installed and working.  Sun hardware is already certified to run Windows Server, and already has an OEM agreement with Microsoft in place.  So, it’s not difficult to make this change happen. And, by the way, don’t just allow customers to buy these products, push them enthusiastically.  Bring this new offering to market within seven days.

2.  Focus On Direct Selling From the Sun.com Web-Site

Acknowledge Sun’s sales force is largely incompetent; especially when it comes to dealing with smaller customers.   This can’t be fixed quickly - the problems run deep and are embedded within the culture and processes of the company.  So,   side-step these problem by having a focusing on direct sales from the Sun web-site.

The current Sun on-line store is a disaster.   It looks like it was built using some crappy off-the-shelf e-shopping cart system. For any potential customer that doesn’t understand Sun’s product offering, it’s next to impossible to find products that are useful for them.  And actually, it’s pretty damn hard to find what you want, even if you do know what you’re looking for.

That means a new web-site is needed.  Don’t try to re-invent the wheel here.  Acknowledge the sales and marketing people don’t know what they’re doing, and simply copy the Dell.com site.  Is Dell.com as good as it could be?  No it’s not.  However, it’s several orders of magnitude better than the Sun.com site.   Also, copy Dell’s direct sales process with respect to account managers for repeat sales.  That means, reply to e-mail requests for quotes within two hours of receiving a request for a quote.

Bring the new web-site on-line for the x64 server range (with Windows given equal billing to Solaris) within 30 days. The rest of Sun’s offering should be be incorporated witin 90 days.  Where the purchasing decisions are complex, which they are for some hardware, there should be a way to e-mail a sales account manager to help the customer.

3. Clearly articulate a single unique selling point for Sun x64 Servers

Why should a customer buy Sun x64 servers vs those from HP or Dell?   There needs to be a single, easy-to-understand value proposition that is unique in the market place; and it needs to be compelling to customers.  For example, as long as it’s true (which it may or may not be), this USP could be: “Sun Microsystems x64 Windows, Linux and Solaris Servers - The Green Choice. Sun x64 servers use less power and emit less heat than equivalent competing offerings, and so save you money on your power and air conditioning bills.” Whatever it is, decide on this USP within 30 days, and articulate clearly and prominently it on Sun’s new web-site.

Bottom Line

Note that I am suggesting that these should be the top priorities.  That means, if resources need to be moved from other projects to make it happen - so be it.   For example, if top talent software engineering resources need to be drafted in from various projects around the company to make this happen, so be it.  Remember though, “NO CREATIVITY REQUIRED”.  The job is to make the new web-site work like Dell.com.  Not “like Dell.com rendered unusable, because someone thinks they can make the site better Dell.com.”

There’s lots to do after this, of course; particularly around leveraging the benefits of Sun’s software stack (xVM virtualization, Open Solaris [including ZFS, MySQL, Java etc). However, the above is what I think the 30-day plan should be.   After those 30-days, the priority should become getting xVM Server delivered to production, to enable Sun to deliver out-of-the-box virtualization solutions (including bundling OSes like Windows Server on top of it in pre-configured VMs) at world-beating prices.