IBM’S “SUNDOWN” ATTACK – Big Blue Goes for the Jugular with Sun’s Channel

August 4, 2009 at 9:40 pm Leave a comment

By Beth Vanni

It’s been one of the longest standing IT cross-town rivalries for decades.  Innovative, irreverent, scrappy Sun Microsystems maneuvers to compete with big, formal, complex IBM.  A more stark contrast in cultures and marketing campaigns has never before been seen.   But, when Oracle was the triumphant suitor winning the bid to acquire the assets of Sun Microsystems, IBM’s attention was redirected to the assets, customers and partners of its Silicon Valley competitor.

The technology wars have raged on publicly forever between the two companies –  at the operating system, enterprise and mid-range server, middleware and storage product levels.   But, the battleground for channel partner mindshare and investment has been less visible.  Until now.  In an analyst call earlier this month, IBM reviewed in detail its strategy for gaining support and momentum with Sun’s customers and partners during the integration of Sun by Oracle.   IBM touted their wins with 250 Sun accounts just in the first half of 2009 and their migration of over 1800 competitive Sun installations to IBM technology over the past 3 years.  Their “Migration Factory” has offered resources to ease the cost and risks of migrations from Sun’s technology for years now. From a technology perspective, IBM certainly has a compelling and predictable technology story for channel partners.  While application development and chipset innovations have not historically been IBM’s hallmark, what Sun partners gained in innovation they often sacrificed in program and business process predictability.  With rumors abounding about what Oracle will really do with Sun’s legacy systems business, IBM is fueling the FUD fire to hardware integrators about an unclear technology roadmap.

Measuring partner support, IBM execs indicated they have engaged over 200 of Sun’s channel partners and ISVs in 2009.   Marketing materials say that one-third of these partners have never worked with IBM before.   Over the past five years, many traditional Sun integrators have been diversifying their enterprise products portfolio beyond Sun, if for no other reason than to put a safety net under Sun’s unpredictable financial results.  From many personal conversations with Sun integrators, this diversification beyond Sun seemed to tip toward HP as much, if not more, than to IBM.   Either way, the ranks of Sun’s partners who remain Sun-exclusive are fewer than ever, despite the companies’ continued incentives for partners to remain 100% loyal.

When smart partners look beyond the polish of IBM marketing and recruitment materials, they’ll see some head-turning evidence of market support.  Specific customer wins in key Sun verticals and 43% of ISVs stepping up their commitment to an IBM port are facts hard to argue.   But, it’s the undocumented, daily dynamics of doing business with IBM for the “average” solution provider and ISV that go unmentioned.  We see the scorecard of pros and cons to Sun partners teaming with IBM as follows:

IBM PROS IBM CONS
Clear, predictable systems architecture and technology roadmap IBM has not been known for their swift time-to-market and has notoriously inundated their channel with the breadth of their server portfolio.  Predictability is only good if choices are clear and complexity is low.
Migration Assurance Thousands of packaged and customer applications were built from scratch for Solaris;  that migration will take a lot of money and time.  Without direct subsidization, neither partners or customers are going to be anxious to increase their costs or risks right now.
Robust Ecosystem Yes, IBM has a broad and deep partner audience.  But Sun partners like being one of a couple of thousand partners – not one of 100’s of thousands.   Partners have been Sun-exclusive for years for a good reason – market differentiation and margins.
Industry expertise Yes, IBM has a huge set of resources to cultivate and market business-relevant solutions, including a host of partner incentive programs.  But dislodging Sun/partner strongholds in Sun legacy markets such as telco, financial services, government and entertainment and media will be a long road for IBM.
Ease of doing business Sun is known for doing what it takes to win each and every deal.  IBM has been known for its slow responsiveness and business complexity.   We’ll see how the IBM “Radical Simplicity” initiative has reached the channel yet, if at all.
Channel conflict Despite their own bravado, Sun’s direct professional service team was kept in check in size and resourcing.   IBM is the opposite end of the spectrum here.  We’ll see how Sun partners navigate engagement models with (or around) IBM Global Services.

Although there’s blood in the water right now, the flame of competitive attack will likely burn within IBM for at least another 18-24 months to show big results.  It’s one of those “be careful what you ask for, you might get it” adages.  Smart Sun partners should certainly explore every incentive and resource available to diversify their business beyond Sun hardware and software.   And, partners looking forward to a long-term product and services practice around IBM will likely not be disappointed.   But, for those looking for a supplier relationship to address all their concerns with Sun and Oracle – free from complexity, confusion or conflict, IBM won’t present the perfect match.

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Entry filed under: Industry Perspective. Tags: , , , .

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