Dealers demand smooth upgrade path from Sun

The UK's largest reseller has called on Sun Microsystems to put a program in place to protect sales in the lead up to the launch of its new generation Ultrasparc III workstations and servers and Solaris 8 operating system.

Neil Parker, general manager of open systems at Computacenter, said he had asked Sun to "come up with some sort of program to protect forecasted business", over the next few months.

The problem of transition pricing was highlighted last week by Gartner Group analyst Tom Henkel, who advised users to demand a discount of at least 30 per cent on Ultrasparc II products running Solaris 7 because they will soon be replaced in the product line.

Ultrasparc II users who want to move to Ultrasparc III technology, which is due to hit the market by autumn 2000, will have to make a complete box shift, as the new processor is not field upgradeable to existing systems. Solaris 8, the new version of Sun's Unix operating system is be released around the same time.

Parker said Sun could deal with the issue by offering 'no penalty' upgrades, which allowed users to pay the difference in price and upgrade to the new hardware and software, once it was released.

Another option would be to allow customers to order and pay for new machines now and lend them current model products until the latest models became available, Parker said.

"Historically Sun have been very good about this," Parker said.

Gordon de la Mare, director of Sun global alliance at Amdahl, said he had not seen any decline in sales in the lead up to the new product launch and did not expect customers would ask for, or receive, the deep cut discounts predicted by Henkel.

Analysts regularly offered such advice to users but unless they were looking to spend "hundreds of millions" on Sun kit, bargains on this scale were unlikely to be available, de la Mare said.

"I see a lot of prices and discount levels worldwide and I see a lot of customers buying at less discount [than that]," he said.

Craig Churchill, desktop marketing manager at Sun, said the vendor was unable to announce technology transition plans until a release date for the new products was announced.

"As we move forward and can better define when Ultrasparc III hits the streets, we will be working with resellers to protect them," Churchill said.

Meanwhile, Sun would not be slashing prices to maintain sales.

"In terms of pricing strategy, what we do is price according to the competition and value proposition," Churchill said. "We tend to find that workstation customers want power and productivity now. They're looking for the best of breed at any time.

"Sun wouldn't advocate dropping price points to an obscene level because new technology is coming out," he added.