- Crawford Beveridge CBE, Executive Vice-President, Sun Microsystems
Crawford Beveridge, the Executive Vice President of Sun Microsystems, has spent the last 35 years in the global microelectronics industry, amassing a wide range of experience along the way.
Before joining Sun in 1985 as Vice President of Corporate Resources, he worked in human resource management for Hewlett-Packard Co., Digital Equipment Corp., and Analog Devices. He left Sun in 1991 to head up Scottish Enterprise, where he remained for the next eight years.
Crawford returned to the company in 2000, and presently represents Sun’s interests at government levels in geographies outside the US where it has significant interests in such high-growth economies like China, India, Russia and Brazil.
Sun Micro today employs 38,400 people in 100 countries, including 700 at its Linlithgow plant in Scotland.
Crawford’s main home is in California, but he maintains a house in Edinburgh (where he was born) and visits Scotland as often as his hectic travel and work schedule permits. He currently spends more than half the year on the road. He is also a non-executive director of Scottish Equity Partners.
In Part 1 of a two-part interview, Crawford talks with 2in10 Ltd Chairman Alastair Balfour about his role and responsibilities at Sun Microsystems, as well as the challenges facing this multinational company today and in the future.
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What are the main challenges that you face in your job today, especially in dealing with the cultures and regulatory practices of different countries?
My job is mainly trying to get governments to understand how the policies they adopt affect the growth of both our industry and their own economies. For example, just now there are constant pushes by governments, particularly at the EU level to clamp down on intellectual property (IP). Some of the ways they go about this could absolutely destroy the open source industry, which is by far the fastest-growing piece of our software industry. So, my job is to help ensure that the legislation they write is sensible.
What are your views on ITC activities in Scotland?
One of the positive things that has happened here is allowing foreign technology graduates to stay on for a couple of years after their graduation. This has meant that the talent pool has risen as well as reversing some of the emigration trends. This is good because we tend to invest where talent is available.
How is Sun’s Scottish operation doing?
Well, it began 15 years ago as a pure manufacturing plant, but has gone through an awful lot of change, with most of our manufacturing now being outsourced to Eastern Europe and the Far East. It has had to significantly upgrade its skill levels. Hugh Aitken who runs that site has done a fantastic job of keeping it up to speed through all of these transitions.
What are Sun’s key challenges today?
Sun is neither a small company nor a particularly large company – most of its competitors are significantly larger businesses. So, it really needs to decide what type of company it wants to be, and for us that has meant two areas of focus: Innovation – and I suspect most of our customers would agree that Sun has some of the most innovative products around; and Execution, in actually being able to deliver on your promises in a world where you are out-numbered 10-1 by people like IBM. Our focus is on providing total systems to our customers.
Where would you expect Sun to be in five years’ time?
If we can keep innovating, which I expect we can since we spend close on $2bn a year on R&D, there is no reason why we should not continue to grow to become a substantial player in all systems activity and the running of the Internet. I don’t think we will become another IBM, nor would we want to, but as a respected supplier of equipment we can run a very healthy business. We will be around $14bn this year and there is no reason why we cannot continue to grow that.
As you know, the 2in10 mantra is based on product and channel management, and marketing processes that are so absent in many of our companies in Scotland, yet are so critical in selling ITC products in global markets. How integral do you believe they are to the industry internationally?
Very integral. Engineers, God bless ‘em, have a tendency to produce the niftiest technology irrespective of whether there is anyone out there with the slightest interest in what it will do. The whole notion of really understanding customer needs and feeding those needs back into your design processes so that products are relevant is a very important issue for us.
Sun is structured along very clear lines, with vertical product groups marketing through global channels. So, it would seem this is key to the company’s overall strategy.
That is correct. We do an awful lot through channels and really leverage channel partners, as we cannot hope to cover all the customers ourselves. In many countries, we explicitly go through channel partners, and in others we cover all but the largest customers through these partners. It’s probably at least half of our total sales that go through channels – they are that important.
And the industry doesn’t really know any other way to sell its products globally?
If you accept that most organisations have some need for the kind of infrastructure that we sell, people like telcos, bank and governments which are our largest customers, you just can’t cover them all worldwide with your own sales force. It would take hundreds of thousands of people to do that and it’s just not economic. Most of the industry has figured out that to reach most customers you need channel partners.
Were you surprised to learn that these processes are endemically lacking from most ITC companies in Scotland?
Not overwhelmingly. I think this is a consequence of the branch economy syndrome, in that most companies are like Sun’s Linlithgow plant which has little marketing capability as our focus is on figuring out operational issues. So, when companies spin out from these operations there is no reason why they would automatically see these issues as being as important as they actually are, or identify these missing skills. So, the successes of what we used to call Silicon Glen were really built around manufacturing operations, not complete business divisions, and so the marketing skills were never properly deployed.
To what extent could Sun be interested in the offerings of Scottish technology companies to help take their products to market through its channels?
We are interested. There is a Sun Partners Group to manage these sorts of relationships. What you find though is this elephant-and-flea syndrome in that it is very hard for a small company to go figure out who is the right person inside Sun to talk to. I have tried to help some of the Scottish companies to make contact with the right people in Sun, but the corporate timeframes are usually longer than the timeframes of the people we are trying to get involved with, so you have to put huge amounts of resource into trying to get our attention. It’s sometimes more trouble than it’s worth. That is a shame as there are frequently very good technologies out there that we would like to partner with, but it’s very hard to get the two things to match. When it does work it is usually more serendipitous than managed.
Can companies approach you through Linlithgow or Sun UK?
The problem is that our Partner Group is based in the US, so someone here has to figure out the right person to talk to over there. Certainly the folks in Linlithgow can help point them in the right direction.
Can you think of any good examples of companies here, which have successfully built international businesses through partnering with Sun?
There are a couple. One in particular – it’s a UK business, not Scottish – which has produced a load-balancing piece of software, which piggybacks on a lot of stuff that we produce. Frequently, of course, we end up buying the company. I’d guess we buy a small technology company at the rate of one every six weeks or so, because if it has a technology that is really critical to us then we need to make sure that it is incorporated within an entire products set.
Can you describe the journey that such a company has had to undertake to get to this point?
Somehow we need to get them connected up with the partners’ marketing folks or with a particular product line, depending on the type of relationship that they want to have. Then, they have to get their share of mind, and Sun is one of these places where everybody is always over-stretched. You don’t tend to get managers coming in of a morning and saying to themselves, “I wonder if I can help a small company today?” So, you have to nag and be very persistent to get a meeting.
Then there is usually a technical qualification process during which we try to work out whether we can both make money together, whether for example the product should go on Sun’s price list or whether we just bring the partners in to the market by the hand. That usually causes a lot of small companies to stumble at this point because it can take many months to go through this process and use up a lot of scarce resource. We probably need to be better at saying to the small companies at the outset – look, this is a very long journey and you are going to get very pissed off in the middle of it.
But it is still important to Sun’s innovation drive to find new technologies from small companies?
It is, and that is why in parallel to our partners programme we also have a group whose sole purpose in life is to try and find acquisitions for us. They tend to be engaged mostly in the US and so we often miss stuff elsewhere. But we do know that even with such a large spend on R&D we cannot cover off all the technologies that we want to have. We have to be constantly on the look out for other products that we’ve missed.
What does a small company need to do to become one of Sun’s partners?
The most important thing is that they need a technology that fits. Sun is probably not going to adjust its software stack to suit them, so if it doesn’t fit technologically then we are probably stuck. Then they are going to have to have some marketing skill that allows us to understand how they really meet the customer need and enhance what we have already got. If they can pass those two tests then we’re on a good path.
End of Part 1
Click here to go to read Part 2 of the interview.
