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Sun reverses itself on fire sale, gives channel its due

Sun has changed its mind about a direct-to-customer discount-hardware sales site -- and agrees to give partners part of the deal.

In an about-face that shows the power of the channel and the ability of a vendor to listen, Sun Microsystems Inc. has announced that it is scrapping its plan to sell some of its systems at a discount, directly to customers. Instead it will include partners in the online discount sale it is running to celebrate the company's 25th anniversary.

The heavy discounts – some as high as 65% -- were supposed to be a benefit for customers to encourage them to order directly from Sun. The announcement Monday set off a vigorous round of complaints from channel partners.

In a late evening statement to, the company said: "Effective immediately, the sale will include three new elements that directly add value for Sun partners.

First, resellers can register deals that were generated by the reseller, but ended up being transacted via the Sun store; second, customers can indicate the partner they have been working with so that Sun can credit and compensate partners for this business; and third, partners with deals in process that meet the sale criteria, can register those deals."

The statement also reiterated its support for Sun's channel partners and said the company wanted to take immediate steps to "ensure partners derive benefits from this short term promotion," the statement said.

One partner who gave Sun an earful today was Patrick Edwards, vice president of sales at Alliance Technology Group, who got his chance to vent in a meeting Sun had arranged as a routine chance to get some feedback from partners.

"One of the things I said to the Sun executives is 'what on earth are you doing to us!'" Edwards said. "They have really ticked off a lot of partners; unbelievable."

Controversy began on Monday when Sun announced the sale of several products and services:

  • 50% percent off on the Sun fire x4500, and up to 50% off of the Sun Fire x4600 server.
  • Up to 60% off the Sun Fire CoolThreads systems, with up to 50% off the high-performance x64/x86 and SPARC workstations were also announced.
  • In storage the Sun StorageTek 5320 and 5220 NAS appliances were reduced up to 65%.

  • In services Sun is offering 40% off a service plan with the SunSpectrum instant upgrade program and 25% off most Solaris support subscriptions.

    To make it cheaper for customers using Sun Solaris OS, the company will give free Sun development tools such as Sun Studio and NetBeans software.

    "We regret that this promotion was not more fully inclusive of our partner community."

    Sun Microsystems Inc.

    Aside from damage to its relationship with channel partners, the discounts also confused customers, Edwards said.

    "Customers we have sold these systems to have called inquiring if they are going to get credits, or if they can receive those kinds of discounts in the future," Edwards said.

    According to Sun, the sale was intended to be a vehicle through which Sun could support its channel. The statement continues:

    "As for the 25th anniversary sale, Sun marketing designed the 25th Anniversary Web Sale to invest in building opportunities for Sun and its partners by creating new customers and expanding markets. We regret that this promotion was not more fully inclusive of our partner community. Early results have shown a higher than expected amount of interest and activity. As a result of discussions with a number of our partners, we have realigned the program to support Sun's channel strategy," the statement said.

    The company also defended its practice of using innovative marketing techniques catch a new generation of customers. Sun also said that Web 2.0 and startup companies make buying decisions in different ways than today's F500 and the company's marketing strategy is to test new ways to engage these potential customers.

    The statement also said: "With this sale, Sun continues to explore new programs like its Try and Buy -- programs designed to reach new customers and make it easy for them to try out our technology -- all of which serve to help grow opportunities for Sun and its partners."

    Let us know what you think about this story; email: Nicole Lewis, Senior News Writer.

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