Since its founding in 1982, Sun Microsystems, Inc. has grown to become a 13 billion-dollar global technology giant with a presence in more than 100 countries and a technology portfolio that touches most every facet of hardware and software.
Key factors driving this growth and success are Sun's product and channel marketing strategies that stress solutions and channel partner benefits as well as customer value propositions. Not an easy task since Sun is an engineering-driven company that is well known for its innovative technologies.
"There is a natural conflict between an engineering community and a marketing community,” notes Anthony Medeiros, Senior Director of Global Channel Strategy at Sun Micro. Finding the right balance is also a constant challenge, he says. “Just because you get one product right, doesn't mean you'll get the next product right. A product marketer is constantly looking at how that customer and the market needs are changing and choosing the right things to keep it fresh and real."
Medeiros speaks with some authority on the topic since he is an engineer and technologist by trade, who worked at such prestigious organizations as Hewlett-Packard Co., NASA and the Lawrence Livermore National Laboratory, the U.S. government's top nuclear research facility.
He came to Sun Micro about 18 years ago, starting in product development, then product management and later migrating into marketing in terms of channel strategy. He is now the Senior Director in charge of Sun's Global Channel Strategy and has a keen understanding of the dynamics and challenges of channel marketing.
Mr. Medeiros talked with 2in10 about the importance of channels in Sun's continued success, and how the same rules and practices can be applied to help companies of any size achieve success in global markets.
How important are channels, or at least knowing about channels, in the product development cycle?
It's not just about the technology and probably never was just about the technology. The channel and a company's place in that channel are absolutely critical to a company's strategy and to its success. Innovation in product marketing and channel approaches is just as important as technology innovation.
What kinds of changes are happening in the marketplace and how is Sun Micro reacting to those changes?
I've been here for 18 years and the last five have been difficult because of the bubble burst and some of the economics on price points for our customers. Even very early on at Sun, we understood marketing better than we gave ourselves credit for, or we were incredibly lucky. We understood there is a customer at the end of this process.
I think most technology companies start with engineering-minded people. Some are better at understanding the customer problems and creating something innovative to solve these problems, and then having the ability to wrap something around it in the initial phases. This is critical.
Over time, especially as you become as large as Sun, you start to recognize that before you go off and create these technologies you have to have a customer at the end of it who is willing to buy it. So, you do a lot better job of the analysis and the research and competitive views concerning how you do or don't do things.
How have the changing dynamics of the channel impacted your approach to customers and understanding their needs?
It's not as simple as having the hottest box or the best piece of technology. Customers have got to feel that you are a partner that has some legs under them that's going to last. They are definitely looking for a business partnership and for someone who understands more than just their technology, but how that technology can be used to solve those customer problems. They also want to be sure that this vendor and this supplier will be around to grow with them.
It's bigger than just a technology sell right now. It's a relationship and really a package of business services that are going to solve this customer problem rather than just throwing MIPs and power out to them.
So, it would seem that a successful channel strategy would be one that not only involves knowing and supporting customers, but actually feeling their pain, so to speak.
The best and most successful channel partners at Sun look at it that way. The best and most successful sellers of our technologies are those that have established the relationships and recognize channel resources as an extension of their company.
Are you finding that you have to educate channel partners in terms of their thought processes regarding the relationship between technology and a customer needs?
If they don't understand this they don't survive. At the end of the day, the customer tells them by not buying from them. If a channel partner's complete value-add is here's the product, here's the list price and here's your discount then that's really not going to be a place where a customer will by from. On the other hand, if the channel partner representing Sun is adding value in terms of services or intellectual property or some other means and that partnership works to solve that customer's problem, then they're going to purchase from them.
Those people in any vendor's channel group that were just pushing boxes probably don't exist anymore, and the bubble is the point where they ceased to exist. People who don't add value today are not going to make it.
Are larger companies better equipped to function without extensive channel programs, or are theses companies more reliant on channels to sell technologies and solutions?
I think that vendors like Sun, HP and IBM recognize they need coverage they can't get with their direct force, and they need solutions that frankly as vendors they cannot provide alone. The channel partners not only provide the coverage they need, but they provide the ability to integrate solutions and offer the right answers to customers that result in solving their business problems.
Has it become more difficult to manage channel activities, recruit the right partners and make channel programs more effective?
Over the years we've tried to make sure that we offer a very good business proposition to our partners that ensured there is good money in it for them and that they were engaged and doping the right things. That's always a hard thing. We never got unwieldy with our distribution at Sun. We always had a non-over distributed model and our partners have always liked this.
What is the distinction between creating a value proposition for a customer and a business proposition for a channel partner?
It's an important point. You absolutely need to create a holistic value proposition for the customer. Without that, you can't sell. But, a business proposition not only says why would a customer buy, but why would a partner sell? A business propositi0 talks about profitability and monetary perspectives, but also defines why a partner would want to engage with you as a vendor and go to market when there are other choices?
The key question for a systems integrator, a value added reseller or any other type of channel partner is why they would want to do business with Sun? One of the first things on that list as they do that assessment is the profitability potential, such as what is Sun like as a trusted partner, are they going to change policy every year, and how does Sun's product fit into my partner portfolio of capabilities? This is why the business proposition is a critical component.
If having a valid business proposition is so important, why aren't more companies taking the time to incorporate it into their channel strategies?
I'll confess. A year and a half ago, when I walked into this channels job as a product marketer, I knew absolutely what a value proposition is. I don't think I'd ever heard of a business propositi0n, at least in the context that you not only had to come up with a reason for the customer to buy, but why would people in the channel want to sell with you?
We make this assumption that channel players will just do it for us, just like a sales force. We seem to forget that we own that sales force. You have this mentality, especially in engineering-minded companies, that if you build it they will come. And then you have this added burden of most people thinking of direct before indirect channels. With indirect channels you have another intermediary to sell to and they want to know why they are selling that technology.
But, isn't it important to have a good and viable technology to sell before worrying about channels and the business proposition?
It's funny, but a channel partner will push a sub-par product if they have a business proposition that is better via-a-vis the competition. They can only get away with that for so long, but there is example after example of a better technology losing out not because the technology was weak, but because their competitor's channel was more powerful. The best product doesn't always win. The best engineering doesn't always win. The recipe for innovation can't stop at engineering.
As you may know, Scotland has a remarkable history of technology development, creation and innovation. However, Scottish companies today fail to succeed in the global market because they do not understand or are not aware of the importance of channels and having a channel-based business proposition.
The real chasm of jumping from technology to the monetization of that technology is the critical piece. Product marketing and channel strategy and marketing are important, critical and vital innovation that must happen along with it to be able to monetize.
Given your background as an engineer and a programmer and one who is used to solving technical problems, do you find enough challenges as a manager of sales and channel programs?
Interestingly enough, there is as much excitement and potentially even more difficult problems to be solved in product marketing and channel. The reason it is more difficult is because it is such a dynamic environment. Just as technology is changing, the markets are always changing.
More than anything, engineers want their technology to be used. The biggest turn on for an engineer is that somebody is using their stuff. What they need to get in their minds, however, is that this is not enough. Innovation can't stop at engineering. The way you get them to welcome product marketers and channel folks on their team is to tell them that those are the people, if they are good, who will make sure people use their technology. They'll be the ones who really push it from the end of the innovation phase into the monetization phase.
Is it difficult to get them beyond that ‘build it and they will come' mentality?
Yes, it's still difficult here in this company. But, success is the thing that will change people's minds. So, maybe it will take one or two companies being successful for this way of thinking to become more mainstream and adopted.
Is it easier for a larger company, like Sun, to succeed at this transition as opposed to a smaller company?
I think so, but I might argue that to become a larger company you have to have done it. Sun became a marketing and channel company very, very early on. Otherwise, it would never have become a $10-plus billion dollar company. My argument is that no company can cross that chasm without it. In the end, the product is not enough.
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