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Sun becomes a serious storage player, but will VARs push Sun storage?

StorageTek made Sun credible in storage, but it is still having problems keeping its VARs, attracting customers and becoming a profitable storage company.

When Sun Microsystems, Inc. announced its purchase of StorageTek 18 months ago analysts said the decision solidified its position as a serious contender in the storage market.

Sun shifts toward storage:
StorageTek makes Sun a storage player; will VARs go along? Part 2

Sun clarifies disk storage strategy

Sun reorganization trickles down to storage division

Storage Clips: Sun storage chief quits

But the next 18 months will be more telling for Sun, according to IDC analyst Janet Waxman and other analysts, who said the company is generally not considered a must-see vendor for IT customers hopping for high-end storage. Sun has been losing money since 2002 and, Waxman said, needs to prove to investors that it can grow its business and return to stop the losses.

Sun showed signs of recovery during its latest earnings announcement, however, posting a 17% increase in sales to $3.19 billion for the fiscal quarter ended Oct. 1, and a 29% rise compared to the previous quarter.

"It's a chess game and Sun's installed base is the king," Waxman said.

Before being acquired for $4.1 billion by Sun, the three-decade-old StorageTek was known primarily for its high-end tape drives, tape libraries, disk arrays and subsystems, aimed primarily at the high-end IT market. But it had also made significant inroads into storage area networks (SAN), building controllers and other products designed to add intelligence and virtualization to storage networks.

In addition to StorageTek's high-end storage products, according to Forrester Research, Inc., Sun's storage division expanded to a total of 1,800 sales representatives and pre-sales storage technologists, and as many as 2,300 post-sales support personnel.

"We had a very small storage-focused sales force in the past," said Amy O'Connor, Sun's senior director of strategy. By acquiring the former StorageTek sales staff "Sun can have a whole new level of conversation with our customers about Sun's storage product portfolio," she said.

"Sun has an opportunity to go to [data-center] customers and get them to buy disk from Sun storage as well," according to according to Forrester analyst Stephanie Balaouras. "Those customers don't have Sun servers so there's definitely an expansion opportunity there."

Sun's current business strategy, however, is to solidify it base of traditional Sun and StorageTek customers, rather than trolling among IBM and HDS users for new business, O'Connor said.

Sun is working with channel partners to provide technology at the high end, O'Connor said, and has changed the way it views its storage business.

"The acquisition helped us get a much better understanding of how to help customers in a heterogeneous data center so we no longer look at ourselves as being kind of a Sun-attached-only business," O'Connor said. "We understand from a storage perspective the world is not all about Sun servers and Solaris."

Sun's storage strategy

"What is the compelling value proposition that a company would have to choose Sun primary storage over the many competitors in the space like EMC and IBM?"
Andrew Reichman
AnalystForrester Research, Inc.

Sun's product strategy at the high end revolves around a solution sell involving a revamped server line running SPARC chips and the Solaris operating system, and Hitachi Data Systems storage products.

At the lower end, particular among medium-sized businesses Sun has introduced several new products over the last two years such as the Sun Fire X4500 Server, which delivers the performance of a four-way x64 server and a storage density of 24 terabytes (TB) in 4U of rack space.

The company has also expanded its use of mainstream processors from Advanced Micro Devices (AMD), incorporating them inside some network-attached storage (NAS) boxes and virtual tape libraries (VTLs).

It is also incorporating StorageTek products directly into its own products. That sometimes comes in the form of an early death such as that of StorageTek's Flexline 380, whose end-of-life process Sun accelerated so it could incorporate the storage array's technology into Sun's StorageTek 6450 midrange modular array.

Sun execs insist, however, that tape also has a legitimate place in the data center, and point to enhancements such as device-level encryption – which Sun announced in September it would add to its Sun StorageTek T10000 tape drive – as evidence of their commitment to it.

It has also enhanced its server and storage-virtualization and their integration with Solaris.

For the conclusion of this analysis, including VARs' concerns about their role in Sun's reorientation, read more on how StorageTek has made Sun a storage player.

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