First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.
Can Oracle stop Sun customers from defecting to HP and IBM?
- — 28 January, 2010 07:40
The long-suffering Sun Microsystems has faced an especially tough nine months since Oracle announced plans to acquire the company, but failed to immediately close the deal. Customers have fled to rival companies such as IBM and HP, which stepped up marketing efforts with various deals aimed specifically at Sun users worried about the fate of the vendor.
Now that Oracle is finally putting the finishing touches on the acquisition, it has a chance to stop the flow of customers away from Sun. But it will be difficult.
"The onus is on Oracle to really go out and save these accounts," says Laura DiDio, lead analyst with Information Technology Intelligence. "Oracle has a good chance to staunch the flow early on -- assuming they move aggressively."
Oracle needs to clearly articulate to customers its plans, including which product lines it intends to keep, what licensing deals will look like and how they plan to honor existing support contracts, DiDio says.
Oracle appears to be getting off to a fast start in that regard, with an event Wednesday in which the company is "expected to offer assurances that it will continue to invest in all of Sun Microsystems' main server platforms, in an effort to convince Sun customers that they should stick with those products as the database giant works to reinvent itself as a systems and software company," as reported by IDG News Service.
But Larry Ellison faces tough competition in the hardware industry from the likes of IBM and HP, which have eagerly been plucking customers away from Sun over the past year.
HP convinced more than 350 customers to move workloads from Sun machines to HP in the 12 months ending Oct. 31, 2009, the company says. IBM also offers special deals to Sun customers who agree to switch. In the first quarter of 2009, before Oracle announced plans to buy Sun, IBM successfully convinced 31 Sun Unix customers to move workloads to IBM machines, according to numbers provided by IBM.
In the second quarter IBM completed 67 such migrations, 91 in the third quarter, and 127 in the final three months of 2009.IBM's conversion program also targets HP users. But IBM had much less success luring HP customers over to IBM in 2009, with no more than 49 conversions in any given quarter.IBM had been pulling in roughly $500 million a year in IBM and HP conversions, and expected that figure to drop in 2009, says Scott Handy, vice president of marketing, strategy and sales support for IBM Power Systems.
Instead, it rose to $600 million because of Sun's struggles.Customers counted in these statistics may only have moved one or a few workloads to IBM machines, and may still be running many workloads on Sun. However, IBM claims that Sun customers who start moving a few workloads to other platforms are likely to continue at an accelerated pace.
IBM is targeting Sun's top 300 accounts in particular, and has won business from 111 of them, Handy says.
"Those are the family jewels that are really going to drive a lot of revenue," he says. Overall, "there are 1.2 million Sparc servers installed and I plan to get them. I anticipate two/thirds of those will move to [IBM] Power over a long period of time.
"That will depend on how aggressively Oracle fights to keep Sun customers. Oracle will likely pick and choose which Sun product lines to focus on."
"There's some areas where they won't care about losing customers, like the tape business" says Enterprise Strategy Group analyst Brian Babineau.
In other areas, like the MySQL side, they're going to spend a lot of time trying to retain those customers, and there will be a big mix in between.
"IBM and HP marketing teams tend to criticize Sun products and services but DiDio says the reality is that Sun still has many strong products and that customer losses have mainly been related to price and customer concerns about Sun's financial instability.
"Most of the defections [from Sun] were not about the technology, or service and support, and that's good news," he says.
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