Sun Revamps Sales Organization as IBM Buyout Looms

UPDATED: Sun Microsystems is revamping its sales and services operation to make it more centralized, moving away from the regional model it used for years. Channel partners will play an increased role. The timing of the move is intriguing, considering the reorganization is taking place amid reports that IBM will announce the acquisition of Sun on April 6. However, the planning of the reorganization goes back at least four months.

Sun Microsystems has finalized significant changes to its sales and service organization, resulting in a more centrally structured chain of command-a significant move away from the distributed regional model it has used for years.
Employees were informed of the changes through an internal memo issued April 2.
Under the new plan, Sun's top salespeople will focus exclusively on the company's 300 top customers-primarily in the telecommunications, government, financial services, education, health care and high-performance computing sectors. Channel salespeople will handle all the rest, amounting to about 80 percent of Sun's customers.

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The reorganization is tied directly into the March 30 announcement that Sun is laying off another 1,500 employees, effective immediately. Many of those who will lose their jobs are in the sales and professional service groups.
An industry insider who asked not to be identified told eWEEK that the structure changes may have been initiated as a way to help smooth the way for a rumored $7 billion acquisition by IBM, since the new Sun sales organization will look very similar to IBM's.
The timing of the announcement is intriguing, considering that it is late in the negotiation process. eWEEK obtained information from a knowledgable industry source on April 3 that the deal finally will be announced on Monday, April 6.
However, the planning of the reorganization goes back at least four months, when, on Nov. 14, 2008, Sun announced it would lay off between 5,000 and 6,000 employees.
"That's possible [that the restructuring and the acquisition are connected], but I would say that if an acquisition does go through, there will be a major reorganization of the sales groups anyway," said Charles King, principal at Pund-IT and a longtime enterprise IT analyst.
"But I would expect that making a change as major as this had to have started months before any kind of acquisition was being considered."
IBM reorganized its sales and service structure several years ago into a more centralized, globally matrixed model that has worked well for the high-end enterprise market and less well in the midmarket.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...