November - 2000 - issue > Cover

Gone are the days when a company could get out there and make it all on its own. Partnerships and alliances are today’s buzz words. In fact, growth in technological innovations and escalation in infrastructure costs as well as turmoil in the high-tech market have made partnerships and alliances crucial for high-tech companies. This is true not only in the domestic market, but also in the global arena. The concept of partnerships for leveraging resources, both domestic and international, is becoming increasingly popular. This trend is being seen even in the old multinationals, which have enjoyed an enduring global presence for some time.

Sun Microsystems is a good example. With $14 billion in annual revenue and a worldwide presence in over 170 countries, the original perpetrator of the “the network is the computer” slogan has truly emerged as one of the winners from the shakeout that rocked the high-tech sector this year. According to Rob Hall, vice president of Sun’s worldwide marketing, computer systems division, two issues contributed to Sun’s success in the last year. One obviously relates to the fact that Sun has always remained focused on building a networking architecture, which has resulted in their developing a set of technologies and products that are being leveraged by both dot-coms and traditional companies that form the basis of today’s network economy. The real challenge for Sun, says Hall, has been to recognize the changing business models and the changing technologies, so it can continue to supply “compelling technological solutions.” The second reason that Hall states is related to this or to the extent to which Sun was compelled to change its business model to keep up with changes. He points out that although there is no one way of looking at this issue because “at certain layers we have made no changes at all, and at others we have changed everything,” the one factor that has remained constant through all the changes at all levels is Sun’s commitment to partnerships.

“We have been a great believer in partnerships at all levels from procurement of different technologies to design — we design our chips for instance, but we do not fabricate them — development of software applications, distribution, integration and support systems,” says Hall. He goes on to point out that in India, Wipro is a big partner, whose “support and help in understanding local business dynamics and whose technological assistance and prowess in assembling the building blocks of Sun’s Indian business was critical.” And this is the business model that Sun pursues everywhere from Europe to South America, he adds.

To take the case of India, Sun entered the Indian market for the first time in 1985 with a tie-up with Wipro. In 1995, it established its independent presence through a liaison office, which was converted into a branch office in 1997, and finally into a wholly owned subsidiary in 1998. Now spread over 100 locations in India and with a 400-strong team that supports an installed base of more than 15, 000 systems, and customers which range from Reliance and Cadbury’s to educational institutions like the IITs, Sun is a major player in the Indian market. Already rated number one in the Unix systems revenue and unit market by IDC, Sun has been growing at twice the industry average for the last 3 years. Over the last fiscal year, Sun India reported a growth of nearly 60 percent. According to Bhaskar Pramanik, managing director of Sun India, “as the movement from a PC economy to the Net economy happens in real-time now, it is becoming increasingly clear that Sun is being viewed as a category player in the networking space.”

And what accounts for this resounding success? The company adopted a business model of working in partnership with key Indian partners to deliver its services and products such as hardware platforms, services, certification training and other hot areas. Whereas on one hand Sun works with partners like Wipro, Tata Infotech, CMC, Tech Pacific, Accell ICIM, and Apara in the area of hardware products and services, the company also cultivates major alliances with other global players like Oracle, SAP, and Price Water-House in the software sector.

Nor are Sun’s partnerships limited to the corporate sector. In partnership with the Department of Electronics, NASSCOM and CMC, Sun has invested significantly in setting up the first Competency Center for Java in India at Hyder-abad. It also recently announced the launch of collaborative research programs with the three IITs at Delhi, Kanpur and Kharagpur, where Sun will fund projects on subjects linked to theory, software languages and tools that would enable the creation of technologies to improve the quality and power of network computing. It may be noted that Sun already has a Campus Incubation program which provides technical infrastructure to select graduate business schools all over the world — the Kellogg Graduate School of Management in the US; the Indian School of Business in Hyderabad, India; Peking University in Beijing, China; and Said Business School, University of Oxford, U.K., among others.

According to Jeff Rulifson, director of Sun Microsystems Laboratories in Europe, Sun, which has always made sure that it remains involved with the research going on in leading technology institutes all over the world, became aware of the huge research base in India only last year. “This can have an enormous impact on Sun’s product line,” he said. Although Sun will offer the source code for its Solaris operating system, Java and office automation tools such as StarOffice, the rights to the intellectual property generated by the research will be jointly held by Sun and the research institute.

Pramanik sums it up succinctly: “Sun does not view India merely as a market for its products and services, but as a partner.” And it’s always a good idea to invest in a partner.