Sun rising high on India

After Sun Microsystems India was accorded the status of a GEM or Geographically Established Market in July last year, the company has reworked its strategy to tap the Indian market. The company has been systematically extending its reach in tier- two and -three cities directly and through its strategic regional partner programs.

Baba Sam took over as marketing director at Sun Microsystems India at the time when the GEM status was declared. He unveiled some of the company’s plans and how Sun India has tweaked its strategy to bring in better business, to Priya Padmanabhan of CyberMedia News.

What are the implications of Sun India receiving GEM status and what does it mean in terms of investments and strategy?

Everyone looks at India from the point of view of cost arbitrage. But Jonathan (Schwartz) is more excited about the million developers here. Sun India has the largest engineering center outside the US. India is a Strategic revenue engine for the company. We are taking a 360-degree view of India. We have customers and partners here who can take cost from our balance sheet.

Some of our partners do backend application work here, and also a huge developer base. Our cost curve is coming down because of our Indian partners while the revenue curve is going up thanks to customers and also the innovation that’s coming out of India.

That led us to getting the GEM status. With this, there is a focus right across from investment point of view and also the strategic point of view. More than the amount of investment, we are able to make investment decisions locally. We can decide what product to launch and what price to sell a product. The team is now more nimble footed now.

Can you elaborate on the India-specific plans that you are undertaking to expand the market?

In the beginning of our fiscal year, we decided to go to 15 new cities in India that we have not touched before. We made this decision locally, since we figured that if it is right for our customers and partners, it would be right for us.

In the last six months, we have started operations in 10 new cities either through our own offices or through our Strategic Regional Partner (SRP) programs for tier-two and -three cities.

We found that apart from top eight Indian cities, the other 10-15 cities would give us a potential of $220 million in terms of IT spend. The only impediment we saw was that we were not in front of the customers in those cities.

The cities we have added include Thiruvanathapuram, Coimbatore, Trichy, Vizag, Indore, Bhopal, Nagpur, Guwahati, Jammu and Goa. By March, we would have done three more cities. The other cities we intend to cover are Patna, Ranchi, Ludhiana, Surat and Madurai.

We have added sales and pre-sales people in Chennai, Hyderabad, Pune, Ahmedabad and Kolkata.

Are you focusing your attention on new verticals now?

We started this financial year (July 2006-June 2007) with a strategy that has both a verticalized and horizontal coverage approach. Besides BFSI and telecom, we also think retail is threatening to become the biggest IT spender. The opportunity here is in billions.

This is an area that requires a lot of IT. Retail companies are looking for back-to-back integration. The other vertical is media and portals market. We are targeting portals offering content, services companies and also online media. We have a Web 2.0 action plan in place. Sun has made breakthroughs in these verticals and has added three large retail clients and two large media customers.

Do you see the sales volumes picking up in India?

Of all the top five vendors, we are the only non-x-86 UNIX vendor to gain market share on a worldwide basis. We are seeing double-digit growth after a long time.

We believe that our timing is right. We have launched 19 new products in the last 6 weeks. We have an extensive portfolio of offerings right from workstations to storage and servers and services. We did not have these products 18 months back.

We are also bundling our offerings with other vendors such as Cisco, SAP and Oracle. We are seeing the volumes picking up. Our target is to grow twice that of the market. We are now 40 per cent ahead of the market that is growing at 18-19 per cent.

Is there any change in terms of your offering portfolio?

We took a conscious decision last year in India and 16 GEMS worldwide to follow the “4S strategy.” This includes systems and software, storage, Professional services (not just warranty services) and Enterprise identity management and Service Oriented Architecture.

Some of our wins are system wins, but the change we are seeing is that we are also increasing the share of wallet on other ‘S’es. We have a big learning services business. Banks are rolling out thousands of branches every year and IT bank staff needs training.

We provide learning services and certify engineers on Solaris. We also certify our SI partners on Java and Solaris, implementation on high-end storage, auditing a large data center, doing security audits and ITIL.

How is the market traction on Solaris after it was open sourced?

Solaris is one of the areas that has given us growth. In the last six months from a market capitalization perspective, Sun has added $7 billion of market cap. One of the reasons we have done well is the adoption of Solaris.

We have had six million downloads so far with 70 per cent of downloads on competitive platforms. There are 130 Solaris certified products on Dell, HP, IBM and other white boxes. We open sourced it because adoption drives volumes. And that is exactly what has happened.

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