After reporting net losses in 16 of its last 21 quarters, Sun Microsystems finally revamped the way its sales team operates earlier this year. Sun's recent results speak to the success of its new approach to sales: sales increases of 29% and 17% year- over-year in the last two quarters and world server market share growth at the expense of its two main competitors, Hewlett-Packard and Dell (from 8.9% to 10%). Many clients were complaining that Sun's ever more complex organizational structure was making it difficult to gain the type of assistance they needed when technical problems arose. Additionally, Sun sales teams were pitching products as opposed to trying to help customers with their own particular needs. According to Tim Lieto, rehired to revamp Sun's sales approach, customers "were frustrated with our inability to communicate what we had in the lineup." When Lieto reported his findings to Sun CEO Jonathan Schwartz, Schwartz responded with several initiatives: he cut down Sun's sales teams from seven to four, assigned clients one contact at the company who would become an expert on their particulars and increased the commissions for sales of Software and other products so that the sales team stopped continuing to push only server sales, regardless of a client's needs.
• Sources: Wall Street Journal
• Related commentary: IBM, Sun Lead the Pack in Q3 Server Sales, Sun: Investors Still Looking For Clear Daylight, Sun Microsystems' Data Center in a Shipping Container Will Transform Corporate Computing. Conference call transcripts: Sun Microsystems F1Q07 (Qtr End 10/01/06), Sun Microsystems F4Q06
• Potentially impacted stocks and ETFs: Sun Microsystems (SUNW). Competitors: Hewlett-Packard (HPQ), Dell (DELL), International Business Machines (IBM). ETFs: Internet Architecture HOLDRS (IAH)
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