Sun Microsystems is to acquire hosting services vendor SevenSpace.
SevenSpace runs both client server and web-based packaged and bespoke applications, and can host them in the client’s data center or offsite at its remote center. The company claims it can deliver cost savings of up to 60% on systems costs, delivered in fixed monthly fees.
Sun will pay an undisclosed cash sum for SevenSpace, which does not disclose financial information, but claims to be profitable at a pre-interest, tax, depreciation and amortization level. SevenSpace has about 100 employees, and its clients include The Carlyle Group, Footlocker, Accenture, and Chicago Public Schools.
The deal is expected to close in the quarter ending March 27, 2005, when SevenSpace will fall under the services operation run by Sun’s global services chief Marissa Peterson. She said: It is growing more evident by the day that ‘one-size-fits-all’ outsourcing is history, replaced by managed services that improve service levels at reduced costs.
Sun’s strategy to grow its services business is an interesting one, as unlike IBM or Hewlett-Packard, it does not have a huge workforce of services professionals to take on large infrastructure outsourcing deals where it acquires the client’s assets and attempts to runs the costs out of it over a five or 10-year deal.
Instead, Sun has so far focused on offering implementation, consulting, support, maintenance, and financing services around its own technology platforms. Its move into running heterogeneous environments is a logical one, given that many Sun clients do not run on exclusively Sun platforms, and it will enable it to stretch its managed services to cover a larger section of its clients’ infrastructure.
Sun’s ability to win business to support its rivals’ platforms will be a real test of the delivery capability of its services arm. Sun is a logical choice for clients wanting a third party to run their Sun platforms. But will the vendor be able to recruit and retain the right skills to encourage clients to hand over the management of their HP and IBM platforms as well?
