After almost a year of selling Sun products in Australia, communications integrator NSC has severed its relationship with the Oracle subsidiary and let eight Australian staff go.
NSC managing director Craig Neil
NSC had hired 22 staff to form a business practice to sell Sun's hardware and storage, which was expected to contribute a third of its annual revenue. The practice was headed by former Sun Microsystems senior executive, Michael Salama.
NSC managing director Craig Neil told ARN in May last year that the investment was expected to reap $25 million in revenue in the first year.
However, Neil told ZDNet.com.au yesterday that the return had been "well behind" that number. "We're probably about half that number," he said.
He said that since Oracle had acquired Sun Microsystems, the merged entity had been taking a "very different" direction.
They made the decision for us, really.
NSC managing director
Oracle wanted to sell Sun's products directly to customers, according to Neil. "They made the decision for us, really," he said.
This had ramification's for NSC's new business practice. "What it has meant is we have had to make some changes to our business which will see us change the types of people we've got in the business," Neil said. "So we've unfortunately had to let some people go in Australia."
He said that eight Australian staff (out of around 200) had been told that they needed to go.
The company was now going to get back to its own "knitting", which was reselling contact call centre kit. It would use its partnership with Genesys, which recently acquired Nortel.
As for other customers selling Sun-Oracle kit in Australia, Neil said he didn't know of any other companies being told their reselling model wouldn't work with Sun-Oracle.
"I haven't heard any other decisions being made yet. I guess they're all looking at it — they'd have to be. I would assume you're going to hear a bit more of this," he said.
Neil believed the decision to sell Sun's products had been done at the wrong time.
"We were in the middle of a global financial crisis, we had this Oracle-Sun acquisition looming, [and] customers were holding off on making purchases because they were wondering what the road map and plan would be like under Oracle," Neil said. "I guess we probably shouldn't have done it at all to be honest."
I guess we probably shouldn't have done it at all to be honest.
NSC managing director
"It was a very interesting ride," he said. "At least we now know the Oracle direction and they've been quite clear in that and I think that's one of Oracle's strengths."
NSC's Neil said that the company was still interested in working with Oracle, but only for products within the company's core business of contact call centres.
Oracle was contacted for comment but declined the offer to respond.
The software company has earmarked April as the month it would explain what the acquisition means for the local market.