Sun Microsystems moves closer to consumers worldwide
As business in the US and Europe continues to stagnate, Sun Microsystems CEO Jonathan Schwartz wants to boost the vendor's growth in the world's most populated regions by founding a new sales organization focusing on "Emerging Markets". In announcing the figures for the third quarter of the fiscal year, Schwartz said that the US economy had presented his company with significant challenges; Sun Microsystems closed that quarter with a net loss of 34 million US dollars and sales slightly down, by 0.5 percent, compared to the third quarter of 2007.
In contrast, Sun posted two-figure growth in countries counted among "Emerging Markets". Schwartz says that Sun's sales grew by 20 per cent in Brazil and even by 30 per cent in India, compared to 18 per cent growth in Eastern Europe, the Middle East, and Africa. He said these trends were the result of a fundamental change on the IT market. He notes in his blog that information technology sales used to be mainly to businesses. IT vendors accordingly mainly sold applications for business-to-business communication in Western industrial nations. But today computer networks provide provide many services– music, video, and telecommunications – to consumers, who are also actively targeted by marketing departments. As a result, IT infrastructure has moved towards the business-to-consumer sector, and the largest group of consumers are in the BRICA countries – Brazil, Russia, India, China, and Africa. More than half the world's population lives in these countries. Schwartz emphasized that the teenage and 20-year-old market segment which spends the largest part of its income on music, movies, and entertainment is larger in these countries than in the indistrialised West.
To accommodate this changing market, Sun has not only recruited some new staff members for executive sales positions, but also created a dedicated department for "Emerging Markets". Denis Heraud, formerly Senior Vice President for the Asia Pacific region, is at the helm of this new department. CEO Schwartz has appointed Peter Ryan to direct the global sales and service organization. Ryan replaces Don Grantham, who has left the country after three years at the helm of the Global Sales and Services Organization to move to Sun's competitor Hewlett-Packard.
Schwartz says that Sun's consistent focus on open source and open standards is a decisive factor for the company's success in emerging markets. Specifically, he says that MySQL, OpenSolaris and the OpenOffice suite put the company in an excellent position. As he writes in his blog, "Where is OpenOffice deployed in the greatest numbers? In places where saving $300 per desktop is meaningful." Countries like Brazil and India protested the ISO standardization of Microsoft's OOXML document format, which is designed to compete with the Open Document Format (ODF), the standard file format used in OpenOffice.