By Stephen Phillips
Sun Microsystems Inc said yesterday it would offer discounted prices on specialized bundles of its products and services to internet start-up companies in a bid to capture business with tomorrow’s industry leaders. The company said the Sun Developer connection for Startup Essentials, would be tailored to cash- strapped infant e-businesses, independent software vendors, application creators and online service provider, which need to get systems up and running swiftly. Jeanette Kennedy, Sun’s director of .com market development told ComputerWire that the initiative marked the company’s most aggressive pricing on bundles of its products and services, and would sell at a very substantial discount to list prices. Under its terms, Sun is allowing companies less than four years old, and in the pre- deployment phase, to defer payments on products and services for up to six months while they negotiate rounds of venture capital funding. Sun aims to turn around orders to start-ups, which need to get their products to market as soon as possible, within two weeks, Kennedy said. The bundled offerings will span the company’s entire product range, and include complimentary training and certification in Sun’s Solaris operating environment.
Sun’s move is a variation on the vendor financing model under which established suppliers extend preferential rates on their wares to fledgling firms in order to speed the start-up’s time to market – a critical factor in garnering market share in the fast- moving internet economy. Suppliers use the tactic to establish an orders pipeline to companies which could turn out to be the next eBay Inc or Amazon.com Inc. In Sun’s case it is going head-to head with Hewlett-Packard Co’s so-called risk-and reward-sharing alliance service, launched in April, which offers software and hardware to fledgling online services companies at no up-front cost. Under the initiative, HP claims a share of the service provider’s revenue once they are earning. Stacey Quandt, a computer architectures and operating systems analyst at Giga Information Group told ComputerWire that Sun’s initiative was an extensive and a clear counterpoint to Hewlett-Packard’s e- business offerings. HP announced a $17m order with internet- based outsourcing company, Intira Corp, under the venture financing initiative, on August 31.
Quandt characterized Sun’s strategy as two-pronged. It is a hardware play with new services that tie users to Sun products and the internet as next-generation platform of e-business, she said. Microsoft has been slow to recognize the paradigm-shift to the web and while they are refocusing on the opportunities of the web this is another opportunity for Sun to push a stake into Microsoft’s heart, she said.
Sun’s Kennedy said the initiative builds on the company’s success-to-date in marketing its heavy-duty Sun Solaris servers to internet companies. Officials at Sun said yesterday that the company sold hardware to 112 new internet companies in the quarter to September 30. Kennedy said Sun had launched a recruitment drive over the summer to assemble a dedicated cadre of sales staff, engineers and business managers to spearhead the new service. She said sales staff were to be paid on the basis of the pace of technology adoption of the companies they sell to instead of the traditional commission-based model.
