Sun Finds New Customers At Online Auctions
By Mike Cruz, CRN
Palo Alto, Calif.
4:49 PM EST Fri., Aug. 25, 2000
Sun Microsystems is discovering that the previously untapped world of online auctions can serve up new customers.
Earlier this year, Sun initiated a pilot to sell some of its products through eBay, Mercata and TekSell.com. The company now quotes statistics that show 45 percent of the customers who purchase Sun products through the auctions are first-time Sun users.
Online auctions "are a big part of where e-commerce is today," says Alex Rublowsky, group manager at Sun's auction program office. They may also be a potential boon for Sun's channel partners, he says, because many auction buyers are asking for things they cannot get directly from Sun, such as integration services and storage area networks.
The goal of Sun's pilot program was to leverage dynamic pricing and the Internet, Rublowsky says. The thinking was, "Why not bring these two tools together and see how powerful they can be?" Rublowsky says.
Sun uses the auctions to sell off new, excess, mature and reassigned inventory, says Rublowsky. But complex purchases such as Starfire servers cannot be made by auction, he says.
The pilot program was designed to give solution providers more flexibility in purchasing products, as well as to relieve sales representatives of that responsibility with the goal of making the reps more like consultants to solution providers, the company says.
Solution providers might prefer to buy products at auctions instead of through sales reps because they can get a lower price.
Another goal of the program was to help Sun make further inroads to small and midsize businesses.
Sun officials would not say how many of its solution providers were participating in the pilot, nor what percentage of its sales were occurring through online auctions. But Rublowsky did say Sun's auction activity has seen "a much larger volume" since the program was opened in July to members of iForce, a category of Sun solution providers that includes e-integrators, VARs and systems integrators.
One iForce member, which Sun declined to name, has purchased 65 systems since July. Their total value comes to $495,000, says Rublowsky.
Rublowsky admits that not all Sun resellers are happy about the company's foray into online auctions, thinking it creates a channel that competes against them. "Some people are embracing this, and some people still do not see the value," he says.
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