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PRC Galaxy Plan: the STRATEGY piece. CDP Product Management Team Nov 1, 2005. Breaking out of the "Unix" niche and into the mainstream "Industry Standard Servers". The “Industry Standard Server” Space. Core Revenue US4/US4+/US3i. Core Revenue US4/US4+/US3i. Galaxy. FY061H. FY061H.

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prc galaxy plan the strategy piece
PRC Galaxy Plan: the STRATEGY piece

CDP Product Management Team

Nov 1, 2005

breaking out of the unix niche and into the mainstream industry standard servers
Breaking out of the "Unix" niche and into the mainstream "Industry Standard Servers"

The “Industry Standard Server” Space

Core Revenue

US4/US4+/US3i

Core Revenue

US4/US4+/US3i

Galaxy

FY061H

FY061H

FY062H

the basic rules of market penetration
The basic rules of market penetration
  • In each market segment, there is an entry barrier protecting the incumbent players.
  • For a new comer to enter and profit from the market segment, it has TWO strategies to choose from:
    • Be better at the established games
    • Re-establish the rule of the game
  • If it cannot do either of them, its return will be ZERO.
  • PRC Market Engagement Rule No. 1: Don\'t commit the "China Myth" fallacy.
the x86 landscape the critical success factors for the incumbent vendors
The x86 landscape: the critical success factors for the incumbent vendors
  • Horizontal specialization:
    • Application: ISVs with well-trained Windows or Linux skills
    • OS: Microsoft Windows, Linux
    • Hardware: Dell, HP, IBM boxes with Intel Chip
    • Services: Dell, HP, IBM Nation-wide service network
  • Economy of scales, delivering high quality solution & service at very low cost:
    • Application: Microsoft\'s back-office suite. Easy to deploy.
    • OS: Windows, Linux training organizations everywhere.
    • Hardware: relentless driving down costs in every aspects
    • Service: blex-style national service network
the unix risc landscape the critical success factors for the incumbent vendors
The Unix/RISC landscape: the critical success factors for the incumbent vendors
  • Vertical specialization:
    • Application: Highly trained ISVs for mission-critical apps
    • OS: Each vendor owns its own OS, Sun/Solaris, IBM/AIX, HP/UX
    • Hardware: Each vendor owns its own chip/box, Sun/Sparc, IBM/p5, HP/PA-RISC
    • Services: Limited service coverage
  • Very high System Performance & RAS delivered at high cost:
    • Application: ISV self-developed IP
    • OS: Solaris/AIX/UX specialization
    • Hardware: relentless driving up performance benchmark
    • Service: turn-key service by ISV/SI
two opposing forces at the point of contention
Two opposing forces at the point of contention:

Unix/RISC vendor\'s DNA: strong

vendor-direct ISV support

ISV 32-bit Apps

64-bit Apps

S10x64

Apps

Open Source Linux/Microsoft Windows

Solaris

S10x64

Sparc

Galaxy

Dell/HP/IBM

X86 vendor\'s definite cost leadership through economy of scale

x86 market share based strategy push for hardware volume regardless of the os
“x86 market-share”-based strategy:push for hardware volume regardless of the OS

ISV 32-bit Apps

64-bit Apps

S10x64

Apps

Open Source Linux/Microsoft Windows

Solaris

S10x64

Sparc

Galaxy

Dell/HP/IBM

X86 vendor\'s definite cost leadership through economy of scale

x86 market share based strategy the 1 st sun prc opteron key account project in perspective
"x86 Market-share"-based strategythe 1st Sun PRC Opteron Key Account Project in perspective

“Hi All

XXXX finally won the xxxxxx PC-Cluster project, the final

price is about RMB 2,580,000.00.

Our final proposed price is 2,680,000.00. We have no space to

reduce our price again and again. So we lost the deal."

A simple e-mail from our Acc Mgr:

Remarks:

- we "won" the 1st bid at NEGATIVE 23% margin

- we "lost" the 2nd bid at NEGATIVE 30% margin

- how much can we afford to "win" at NEGATIVE margin

x86 market share based strategy
“x86 market-share”-based Strategy
  • Pros:
    • Rapid volume pick up
  • Cons:
    • Playing to x86 vendors\' horizontal strength
      • Cost leadership
    • Need large sum of margin-relief
    • Before the volume & its associated support infrastructure reach a critical mass, we are still in a non-defensible position, i.e., can be replaced by a simple price drop from Dell/HP/IBM
    • Solaris Sparc unable to reinforce the Linux/Windows-based Galaxy position
s10x64 isv apps conversion based strategy
S10x64 ISV Apps conversion-based Strategy

- Cherry-pick top Lintel/Wintel ISVs in 14 cities and in 20 accounts

- Provide 1-on-1 sales and technical support on S10x64 design-win

- End-to-end hand-holding through design-win & go-to-market

ISV 32-

bit Apps

64-bit Apps

64-bit Apps

Linux

Windows

Solaris 10

Solaris 10 x64

Sparc

Galaxy

Dell/HP/IBM

s10x64 isv apps conversion based strategy1
S10x64 ISV Apps conversion-based Strategy
  • Pros:
    • Playing to Unix/RISC vendor\'s vertical strength
      • Cut the x86 market into vertical segments
      • Horizontal player become defenseless
    • One ISV/app at a time to establish defensible positions
    • Create beachhead for Solaris Sparc reinforcement
  • Cons:
    • Slow volume curve for Galaxy
three steps towards solaris 10 galaxy wins
Three Steps towards Solaris 10 Galaxy Wins

Weapons: Unix Performance at x86 Price

Bid

Config & Bid

Weapons:

S10x64-based Price/Performance

Request for Proposal

Spec-in

Weapons:

Java, Solaris 10, Galaxy

System

Requirements

Design-win

Application

Requirements

Customer Project

Requirements

prc galaxy plan the execution piece
PRC Galaxy Plan: the EXECUTION piece

CDP Product Management Team

Sun PRC

Nov 3, 2005

three steps towards solaris 10 galaxy wins1
Three Steps towards Solaris 10 Galaxy Wins

Weapons: Unix Performance at x86 Price

Bid

Config & Bid

Weapons:

S10x64-based Price/Performance

Request for Proposal

Spec-in

Weapons:

Java, Solaris 10, Galaxy

System

Requirements

Design-win

Application

Requirements

Customer Project

Requirements

sun sales directors galaxy sales scoreboard weekly tracking
Sun Sales Directors Galaxy Sales Scoreboard Weekly Tracking

How to fill up the Scoreboard with solid numbers?

galaxy business key components success factors
Galaxy Business Key Components & Success Factors

Action Required:

- Sun Galaxy Boot-camp

- S10x64 Porting Capability

Sun RSO/CSO

Action Required:

- Sun Galaxy Boot-camp

- S10x64 Porting Capability

Galaxy VARs

Galaxy Master

Distributors

Value Proposition:

- 32 to 64 bit application

performance boost

- Solaris apps scalability

Lintel/Wintel ISVs

In-house

Developer

Value Proposition:

- Unix Performance

at x86 Price

- Single OS benefits

Enterprise Customers

galaxy business key components success factors enterprise customers
Galaxy Business Key Components & Success Factors: Enterprise Customers
  • Objectives: Solaris 10 x64 Buy-in from CEO/CIO
    • Unix Performance (Solaris 10 x64) at x86 price (Galaxy)
    • Single OS across all servers (from X2100 to E25K)
  • Actions:
    • Enterprise Customers Identified & Screened
    • 101 Solaris 10 x64 Galaxy Selling to CEO/CIO
    • Solaris 10 x64 Galaxy PR Campaign
      • Press conference
      • Article placement
    • 14-city NC Road-show
galaxy business key components success factors in house developers lintel wintel isvs
Galaxy Business Key Components & Success Factors: In-house Developers & Lintel/Wintel ISVs
  • Objectives:
    • Solaris 10 x64 Application Availability
  • Actions:
    • Solaris 10 x64 Buy-in from CEO/CTO
      • SUN/AMD 12-city Technical Seminar Oct 31 – Nov 18
    • Solaris 10 x64 Adoption Program
      • CDP & MDO August 8 – Q4
    • ISV S10x64 Galaxy Sell-through Mileage Program
      • Q2 started
galaxy business key components success factors galaxy master distributors
Galaxy Business Key Components & Success Factors: Galaxy Master Distributors
  • Objectives:
    • Master Distributors\' competence in Solaris 10 x64 Galaxy ISV ID, Recruit, Develop & Sales Engage
  • Actions:
    • Sun Galaxy Boot-camp
      • Sun/AMD/Oracle October 28 - 30
    • Lintel/Wintel Solaris 10 x64 ISV Adoption Program
      • CDP & MDO August 8 – Q4
galaxy business key components success factors galaxy vars
Galaxy Business Key Components & Success Factors: Galaxy VARs
  • Objectives:
    • Galaxy VARs\' competence in Solaris 10 x64 Design-win
  • Actions:
    • Sun Galaxy Boot-camp
      • Teamsun/UEC in November
galaxy business key components success factors sun rso cso
Galaxy Business Key Components & Success Factors: Sun RSO/CSO
  • Objectives:
    • Solaris 10 x64 Galaxy Sales & Pre-sales Competence
  • Actions:
    • Sun Galaxy Boot-camp in November
      • Beijing
      • Shanghai
      • Guangzhou
      • Chengdu
galaxy simple guide for sun account managers
Galaxy Simple Guide--For Sun Account Managers

PRC CDP

Sun Microsystems, Inc.

slide26

Galaxy Product Distribution Structure

Sun

Master DistributorDCL/ECS

10% Discount

Teamsun/MDCL/UEC/NS

2nd-tier SI/ISV

End Users

cat e pricing
Cat E Pricing

List Price approximating End User Price

No special bid allowed

NTS Buy Price for Galaxy Master Distributors, DCL/ECS:

12% off PRC List Price

Focus on Lintel/Wintel SI/ISV channel development

No back-to-back order allowed

NTS Buy Price for other CDPs, TS/MDCL/UEC/NS/CGET:

10% off PRC List Price

Focus on enduser engagement

No general stock order allowed

solaris 10x64 galaxy sales methodology
Solaris 10x64 Galaxy Sales Methodology

Identify:

Linux/Windows-based application

Qualify:

If the application modules can either be migrated to S10x64 or is already S10x64-based?

Porting:

Port to S10x64

Spec-in:

Choose the correct config based on customer\'s Performance/Budget requirement

Project

sun galaxy resources
Sun Galaxy Resources

Galaxy Competitive Analysis:

David Chen at [email protected]

http://sunwebcollab.central.sun.com/gm/folder-1.11.988288

Application Migration:

ISV Support:

Anderson Wong at [email protected]

End-user in-house development Support:

Victor Jieh at [email protected]

Solaris 10x64 information page:

http://gceclub.sun.com.cn

https://pes-tools.sfbay.sun.com/ifpp/tam/Tx0xLogin

case study
Case Study

PRC CDP

Sun Microsystems, Inc.

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