IBM has backed off buying Sun, so where does that leave Sun? This may be a negotiating tactic on the part of IBM. Presuming it isn’t and Sun must go solo, it is worth re-examining Sun’s announcements of last week. Sun is laying off staff and announced a channel re-organization. Was that re-org a strategic choice, or a tactical one? Last week the company announced that its primary route to market would be via its indirect sales channel. On the face of it, it looks smart. The company already has a good partner program. Sun said that it had put into place a new inside sales organization in North America to generate leads, a new lead distribution system, training for partners and better partner access to technology. Under the new program, direct sales people will focus on the top 300 accounts. Provided those accounts are named and the direct sales ring fenced, channel partners will be happy – good fences, good neighbours.
In addition, the old sales organization was too complex with too many in-house fingers in a single customer’s pie. An account will now have fewer people involved in selling into an account. That is often the problem with large sales organizations that matrix the customer into confusion – one person for the geographic territory, one person for the customer’s industry, one person for each product line – all commissioned in some way for the sale into that customer. One ends up with an N dimensional sales force and the customer, by being overly served is poorly served through poor coordination and communication. Internally, you can end up with competing fiefdoms.
In the light of all the recent turmoil, are these changes enough to turn the company around or by adopting a more indirect strategy during a downturn, will it accelerate a demise? Anything that involves a major route to market change is going to have a short term negative impact on revenue. No-one can accurately predict the depth or breadth of that dip. Will that Sun be able to ride out the short term to see the long term gain? Personally I hope so, because the industry is more interesting with an independent Sun than without.