Sun Catalyst Program: co-marketing mechanism benefits ISVs, VARs, and systems integrators
How Sun's partnerships promote Sun-centric wares and encourage development
These days partnerships mean everything. Lining up as many independent software developers (ISVs), value-added resellers (VARs), and systems integrators to co-develop and jointly market products is crucial to any company's success. Sun has long recognized this with its Catalyst Program. Continually pumping up the program's offerings is paying off for everyone involved.
The old marketing model -- the run-it-up-the-flagpole-and-see-who-salutes method -- has never worked well in the computer or high-tech industry. Marketers learned quickly after personal and desktop business computers were introduced in the early 1980s that, although these were radically innovative, potentially useful, society-altering devices, no one cared very much. For businesses, the installed base of mainframes with their arcane COBOL databases worked fine, thank you very much. What productive uses could someone possibly find for a cathode-ray tube with a memory sitting on his or her desk? What were you supposed to do with it?
Selling the new iron
Sun recognized early that the only way to make its workstation business successful -- a business that challenged the corporate computing establishment and was about to replace the million-dollar mainframe with a $30,000 machine that could sit on a desktop -- was to exploit the relatively cheap power of the new microprocessors and to encourage development of software based on source code that was available to everyone. "Open computing" became one of Sun's early catch phrases -- a phrase that would eventually seem apocryphal with the explosion of interest in the World Wide Web and the Internet.
"Sun realized probably earlier than any of the microcomputer manufacturers that the hardware is nothing but iron. Without offering a solution to a real business problem, the hardware is useful only as a doorstop," says Peter Schakow, manager of SunSoft's new media marketing group. The new business paradigm, as Sun envisioned it, would combine plug-in and enterprise applications: Sun would exist in the market space previously occupied exclusively by the mainframe, as well as in the nascent personal computing space, which had a questionable potential for generating revenue in the early 1980s.
The real challenge for Sun was creating incentives for software developers -- without whom the hardware meant nothing -- to develop software for Sun systems.
"Thirteen years ago, when the Catalyst Program was started at Sun, most applications ran only on proprietary operating systems," says Anna Weldon, Sun's Catalyst premier and strategic program manager. "The point for hardware developers was to give programmers an incentive to port programs to their platforms."
Sun's open computing model changed the notion of what it meant to have an application that ran on its machines. Instead of localized, standalone computers generating documents or data with restricted, single-person access, the open computing model engendered a networked computing system in which anyone had access to information anywhere in the enterprise.
"The [desktop computing] game has always been who has been the best at getting good programs to work on their machines," Schakow says. "In the PC space, there were already robust applications available. The point for Sun was to gain and maintain the upper hand in 32-bit applications." What resulted, early on, was a catalog as thick as the San Francisco phone book (the first Catalyst offering) that described applications in all areas, from word processors and spread sheets to databases and enterprise computing solutions.
The 5x5 success matrix
Since Sun never intended to enter the desktop software market -- instead restricting its development to hardware and system-level software -- its partnerships with key third-party software vendors were crucial to its success. Through such partnerships, as well as carefully targeting market audiences, Sun developed a market segmentation strategy, the "5x5 matrix," that allowed it to focus resources on industries that were either already huge or were expected to grow in the near future.
The five market segments (industries) Sun identified as most critical were manufacturing, financial services, telecommunications, government, and education.
The five kinds of business solutions (applications) Sun identified as most critical were network business solutions, technical applications (such as MCAD/MCAE), software development, electronic commerce, and globals, which are defined as those businesses whose products directly influence the volume of Sun sales in specific categories worldwide. Globals include companies such as Cadence Design Systems (computer-based microchip design), Mentor Graphics (electronic design automation), and Sybase (enterprise object-oriented computing and database management systems).
Growth industries -- not part of the 5x5 matrix but still worthy of considerable development attention -- were identified as petroleum, retail, media, and health care.
Partnering with Sun
Sun's original Catalyst Program came into being in 1983. From its beginnings as a print advertising vehicle in which Sun ISVs could hawk their wares, it has evolved -- along with the CD-ROM media on which it is now delivered -- into a full-scale co-marketing mechanism. ISVs, VARs, and systems integrators who sign up for the program can distribute sample programs, fully-functional, unlockable software, and documentation to potential customers who are looking for software solutions that run on Suns. In addition, they can hire Sun's new media group to create custom banner and animated advertising that is displayed both on CD-ROM as well as on Sun's Web site.
There are three levels of partnerships that the Sun Catalyst Program offers. The first tier, open to all developers, is SunSoft's Catalyst Program. It provides catalog listing on CD-ROM, equipment discounts, and rental and lease options. Its other benefits, all fee based, include technical support, early access to new products and operating system releases, training, technical conferences, Web page linking, and a certification program. In all, there are some 6,000 to 10,000 application developers taking part in the program at this level.
The remaining two tiers of Sun's Catalyst Program are open to developers by invitation only and are designed to increase Sun's market share in specific industries.
The "strategic level" includes companies that bring in revenues of at least $10 million per year and have a strong presence in a particular industry. Their marketing goals must be tightly aligned to those of Sun. There are approximately 250 ISVs who participate at this level.
The "premier level" includes the top 50 Sun developers. They must have documented revenues of more than $10 million and a proven track record for development on Sun systems. In addition, they must be in the position to market Sun systems as the platform of choice both for product development and delivery. A Sun field representative remains on these partners' sites full time. Two such partners are Oracle and Sybase.
Marketing the whole solution
Besides the Catalyst Program, Sun initiated a number of other co-development and co-marketing programs to encourage developers in particular areas. One of these is the global Internet Associates Program (IAP) announced at Interop in September 1996. The program is focused on meeting the needs of developers, resellers, systems integrators, consulting practices, and Internet service providers that offer products and services to the Internet and intranet marketplace.
The IAP is designed to encourage developers to meet, cooperate, and explore joint marketing opportunities. It provides for membership in a secure, online community that features such innovative forums as discussion groups or chat rooms that are focused on development and marketing of Internet/intranet solutions; access to Java technical resources; visibility as an approved solutions provider; an interactive calendar of events; and product and service listings that can be viewed by potential customers. ISVs, VARs, and systems integrators must meet certain criteria in order to be admitted. For ISVs, these include (among others) two success stories on Sun platforms, as well as products or services applicable to Web technology. For VARs, requirements include a Competency 2000 workgroup certificate and a demonstrable Internet solution. For systems integrators, they include participation in Sun end-user marketing events and demonstrated success -- by way of an end-user reference account -- in systems integration that includes Sun/Internet/intranet or Java solutions.
The benefits of the program both for Sun and third party vendors can be significant. "There are two ways to create solutions to an information technology problem," Schakow says. "One is to have a programmer on site develop an application in house from scratch that works only on the machines that the business owns. The other is to buy a solution from an ISV and have it customized. The problem with the former is that you might make the investment in the technology, and in the meantime, outside the wall, others have already invented a better one.... Software is always being updated.... For end users, value is added not by making software per se, but by matching up individuals and their needs with solutions providers and their offerings ... it's more a question of finding out who needs what and matching solutions to problems."
Sun has a more-than-vested interest in the development of Internet/intranet technology. Between 50 and 80 percent of all communication that takes place on the Internet on intranets at some point passes through a Sun server. "Sun is providing lots of the iron that fuels the Internet craze," Schakow says. "The more we do to encourage development in that area, the better off we are."
About the author
Erica Rex is a free-lance writer based in North Fork, CA. Reach Erica at firstname.lastname@example.org.
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