Sun sketches post-acquisition strategy

Posted on October 14, 2005

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By Kevin Komiega

—Six weeks after it closed the $4.1 billion acquisition of StorageTek, Sun Microsystems is hinting at how it plans to become a major player in the storage industry. Security, sales, and support top the company's post-acquisition "to-do" list.

In his role as vice president of strategy and development, Randy Kerns has been tasked with, among other things, helping the company decide where it wants to take its storage business over the next five years. "We're figuring out what businesses we want to be in, where we should put our R&D dollars, and making sure the business units are aligned," explains Kerns.

But before Sun plots its course for the next half-decade it has been busy getting its own house in order since the acquisition closed in late August. "We have been spending a lot of time adjusting where people are and what they're doing going forward," says Kerns.

Don't panic if you're a StorageTek customer: The personnel adjustments will not affect your sales and support contacts. "We're not touching our sales and support teams. We're keeping them absolutely the same except we're hiring a lot more people," says Kerns.

According to John Webster, founder and senior analyst with the Data Mobility Group, Sun is on track but it has to merge and rationalize its product lines and corporate culture.
Webster believes the key to Sun's storage success lies in its ability to retain employees, in other words, proving that it can convince loyal StorageTek employees that it will be worth their while to stay with Sun and keep servicing their accounts.

So what changes will Sun and StorageTek customers see? Not many, outside of marketing and documentation. As new products are rolled out or updated they will be re-branded as StorageTek. Sun expects most of its storage line will carry the StorageTek name within the next six or eight months.

From a product perspective, Sun is sticking with what it has for now. "We don't have a pressing need to bring something in because we already have the products," says Kerns.

Kerns says that augmenting Sun's NAS portfolio is part of the company's plans in the coming months, but would not provide any specifics. "We do see some areas where we can enhance our product portfolio, but in the long term we're concentrating on putting some R&D into what customers are going to need three-to-five years down the line," he says.

Sun's vice president of network storage, James Whitemore, admits that the ultimate goal of retaining current customers while capturing new ones is a bit more challenging than just telling a better storage story. "The problem with Sun storage was sales, and the StorageTek acquisition solves that. We were missing out on [a large part] of the storage market," Whitemore says.

Sun does have some interesting plans for where it will put its R&D dollars going forward. For example, a big chunk of the storage investments will go toward integrating storage with security and identity management. This is a solid strategy, but how it will translate into tangible products remains to be seen.

"Security has to go all the way down through the data path and we believe we'll be able to do it different from any other storage company," Whitemore adds, alluding to Sun's ability to bring a server, storage, and software portfolio to the table.

Enterprise Strategy Group founder and senior analyst Steve Duplessie believes Sun's strategy is sound now that the company has a large installed base in high-end enterprise accounts via the StorageTek acquisition. Large enterprises, according to Duplessie, present an opportunity for Sun to be successful selling its 9900 series disk systems.

However, the tale of Sun's success will be told by how it executes on independent storage sales in its newly expanded customer base.

"They need to turn the StorageTek sales force on to the rest of the stuff in Sun's bag and then hire more storage-savvy [sales people] to work with the Solaris base," says Duplessie. "Sun has the pieces and understands the game, [but] the question is whether they can play [against] the competition. Just like backup is irrelevant and recovery is everything, strategy is useless without execution."


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