As rivals Hewlett-Packard Co. and IBM pursue high-profile outsourcing deals as a main source of services revenue, Sun Microsystems Inc. is opting to be the anti-outsourcer. The server supplier seeks to provide the types of services that make customers more self-sufficient and is working with partners to offer a wide range of services based on Sun hardware and software. So far, the strategy seems to be working, with services revenues up from the same time last year. In March, the Santa Clara, Calif., company appointed its head of worldwide operations and customer advocacy, Marissa Peterson, to the top post in its services group, after the departure of Pat Sueltz. eWEEK Senior Editor Paula Musich caught up with Peterson, now the executive vice president of Sun services, worldwide operations and customer advocacy, to discuss Suns strategy.
Is your mission different from the one your predecessor pursued?
Its the same charter. Were working hard on more crisply articulating our strategy to be clear on what we plan to do. Weve declared a large-scale move toward recurring revenue: subscriptions, automated network services. Sun is counting on us to deliver new [subscription] services over the Net. Service was important before; its even more important going forward.
Is the new Sun Preventive Services offering an example of that?
Its a paradigm change in the market that has been shown to deliver much better availability. Its unique in that there are 100 different service offerings in one basket we offer as a portfolio. Its subscription-based. We use science in delivering availability to customers. We have a knowledge base comprised of our unique intellectual capital, knowledge of the products, [and] expertise in data center operations and of processes used, and weve put that together in a knowledge base that can analyze a data center operation.
We can assess risks proactively and work with customers to mitigate the risks. Its like doing preventative maintenance. We simplified the process so theres one … purchase order under one subscription price for a site instead of box by box.
We work with [customers] to get them to the healthy stage. Once we get them healthy, there is an agreement on Key Performance Indicators. Once we deliver the results and they stay that way for three months, then we move it to a keep-it-right phase, where we offer them an incentive to stay healthy. It is a relationship approach, a life-cycle approach, and it is a holistic approach using technology and innovative methodologies.
You said its been proven to deliver better availability. Can you give an example of that?
With Motorola [Inc.] in Shanghai [China], we went from 99.3 percent availability to 99.999 percent. Thats getting them from 61 hours of downtime per year to less than 6 minutes per year. They decided later to outsource their data center, but they mandated that the outsourcer use SPS [Sun Preventive Services]. In a six-month engagement for a global automaker, we worked with them on reducing the number of [severe] incidents. We showed a 67 percent reduction in those after our SPS engagement and got them to 100 percent availability.
What role do Sun partners play in SPS?
Were at Version 1.0 now. Version 1.1 will be the partner version of SPS. Next year, Version 2.0 will be the heterogeneous SPS. Thats the game changer. Support organizations do break/fix. The primary goal should be prevention of problems, then restoration second.
With the huge momentum behind outsourcing—especially offshore outsourcing—isnt this strategy an uphill battle for Sun?
We call it “smart sourcing.” Our approach is different from IBMs or HPs. We cant compete when it comes to people and money, so we must be smarter about how we create a value proposition that really resonates with customers. Outsourcing is huge. Two weeks ago in Ireland, 13 CIOs on a customer advisory council told us they are moving back from outsourcing. They are “insourcing” some part [of their IT]. Thats why we offer targeted managed services. We assess which [functions] they need from an expertise, control and innovation perspective and what are we better at. Our approach is based on preserving customer control.
We collaborate with partners to deliver those services. IBM and HP say, “Complexity is our friend,” but you lose control, and you pay them a lot of money and it impedes you from making changes as you innovate. Our customers that did outsourcing became too dependent. We want them to keep control. We scale via technology and partners, not lots of people. We use our knowledge base and intellectual capital. We teach them how to fish; we dont just give them the fish.