"Among other Internet initiatives, Sun this month will roll out portals that customers can visit for customized information on their relationship with Sun.
Here, Sun is lagging behind Dell Computer, which has offered customized pages-"Premier Pages"-to corporate customers for years."
Hi Oldtrader: Here is another article. Leigh
SUN TURNS NET FOCUS INWARD
FRIDAY, SEPTEMBER 01, 2000 11:53 PM
- CMP Media
Sep. 01, 2000 (InternetWeek - CMP via COMTEX) -- Vendor, dotcom thyself.
Sun Microsystems, which helped pioneer the commercial Internet and fancies itself "the dot in dotcom," aims to do considerably more business online. By its own admission, Sun is well behind e-business leaders Cisco, Dell and Intel.
Among Sun's Internet initiatives: Conduct more auctions to boost online sales and procurement, push more supply chain business online, build customized Web pages to better serve enterprise and channel customers, and centralize e-business infrastructure to save money and boost efficiency.
Sun is playing catch-up not because it's lax, company executives and analysts say. Rather, buying and selling over the Net is a far more complex re-engineering process for an established high-end systems vendor than it is for a start-up e-business or a maker of commodity products.
"If you go to any company that has a sales force approach to selling, there's a fair amount of business-practice change that has to go on," said David Wood, Sun's director of e-business technology integration. "Dotcomming a start-up is bloody easy" by comparison, he said.
But if Cisco can sell 87 percent of its high-end network systems on the Net, Sun reckons it can sell more than it does now. Sun would say only that half its sales are conducted via the Internet and EDI networks combined; InternetWeek estimates place Sun's Internet sales at roughly 30 percent of total revenue, or about $5 billion annually.
One approach Sun will use to boost online sales is auctions. Sun now generates only a small fraction of its annual sales from auctions, but the company views them as a way to establish more "dynamic pricing" for its systems, especially including older and overstocked products, said Alex Rublowsky, a Sun group manager who is responsible for overseeing the company's online auctions.
Since it started testing the waters on online auction sites in December, Sun has completed about 2,000 auctions, mostly involving low-end and midrange systems.
Auctions also provide a quick way for Sun to test prices for newer
products.
Meantime, Sun is also using them to find new customers: About half the businesses or individuals who buy from Sun via auctions never bought from the vendor before.
Among Sun's preferred auction sites: eBay, because of its sheer volume of users; Mercata, where the unit price of an auctioned system comes down as the size of the purchasing group-and therefore the number of units being purchased-expands; and TekSell, an auction house that specializes in selling IT products.
Sun also expects to do about $1 billion in procurement via auctions over the next fiscal year. A favorite auction site is B2B hub FreeMarkets.
While most of Sun's procurement is EDI-based, the company carries out some Internet procurement activities on its own, especially in Europe and Asia-Pacific, where suppliers can get information to Sun while their U.S. counterparts are still sleeping.
Faster Turnaround
On the sales side, Sun is performing demand forecasting over the Internet with 13 of its biggest customers and eventually plans to extend that program to 150 of its top customers, said Randy Louie, supply chain program director at Sun.
Using i2 Technologies' Rhythm Collaborative Planner, customers supply information on the quantities and types of systems they'll need to purchase, and Sun uses that information to provide more accurate delivery dates and faster turnarounds.
This collaboration, now done with lower-end products such as desktops and workgroup servers, has enabled Sun to reduce manufacturing turnaround times to one to two days from 15 to 20 days, Louie said.
Sun also uses the i2 software to conduct materials planning over the Internet with 15 of its top suppliers, including all of its processor suppliers.
Some of Sun's systems are actually assembled by suppliers and shipped directly to customers without Sun's intervention. In those cases, the ability of suppliers to query Sun's internal systems directly to obtain inventory status information results in savings of $20 million to $40 million per quarter.
Among other Internet initiatives, Sun this month will roll out portals that customers can visit for customized information on their relationship with Sun.
Here, Sun is lagging behind Dell Computer, which has offered customized pages-"Premier Pages"-to corporate customers for years.
Currently, Sun offers such customization for individual users but not for its strategic corporate accounts. The new portals are designed to help organizations control and monitor spending on Sun equipment, authorize who has access to information about the customer's account with Sun and control who has purchasing authority.
Next month, Sun plans to go online with portals for its partners, offering similar services to the customer sites plus access to information on joint marketing and sales programs.
The portals are part of Sun's effort to centralize its Internet commerce technology and strategy under the eSun business unit. At one time, Sun e-commerce projects sprang up on a grass-roots basis; the company had five different stores on the Web, and many individual product managers had their own content page.
"Anyone who wanted to put up a URL did," said Al Ormiston, vice president of eSun. "We all received the message 'get online,' but we never really got the message early on to 'get online together.'"
The eSun unit is providing a common registration engine and access controls for all users, both internal and external. The unit is focusing on providing Sun's many businesses with consistent technology tools, rather than dictating what individual business units can do online.
"The real challenge with consolidation is that there's always someone who thinks they can go faster than the mass," Ormiston said, "and they're always looking for a hall pass to go out on their own."
The underlying technology for the company's e-commerce sites is almost exclusively Sun's own hardware and software, along with e-commerce software from iPlanet, the Sun/Netscape alliance.
Partners Must Add Value
While Sun's Internet ramp-up bodes well for customers and suppliers, it could could cut out some partners.
"If a partner adds value, we still want them as a partner," Ormiston said. "But if a partner is in business based on delivery and price advantage, we want to recapture that business."
That's got some partners concerned.
"We view the Sun strategy to sell directly to their customers as a threat," said an executive for one Sun reseller, who requested anonymity.
Even a partner that adds value with consulting and other services is threatened by Sun's online initiatives, the executive said, because customers are interested first in Sun's products. If those customers go to Sun first, Sun's channel partners will find it harder to sell them supplemental services.
internetwk.com
By: MITCH WAGNER Copyright 2000 CMP Media Inc.
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