Sun rebranding pushes the value of technology
Sun launched a rebranding exercise this week that is likely to be the first of many, as IT companies struggle to articulate the value that technology can bring to a jaded business community.
The need for such a move was underscored by the latest results from IDC's FutureScan service, which measures supply and demand in the IT industry. This indicated that, while expectations around IT expenditure over the next 12 months continue to hold steady at just over seven percent, buyer optimism is being "dampened by macro-economic realities".
Such realities include the future impact of higher oil prices and on-going global concerns about the US trade deficit. "Even though the macroeconomic outlook has improved considerably in 2005, a number of unknowns remain on the horizon," explained Carol Glasheen, programme vice-president at IDC's Global Research Organisation. "Against this backdrop, many executives seem to be adopting a 'wait and see' attitude towards the next phase of recovery."
As a result, Neil Ward-Dutton, a director at MWD Advisors, described Sun's new initiative as "quite a smart idea" and one that others, especially in the software industry, would have to follow.
Sun is believed to be spending up to $50m (£28m) on the project, which incorporates a new logo, which includes the word 'share', and will run a series of advertisements in leading newspapers and magazines over the next year.
"Share is about trying to articulate the business value of Sun. Its former 'Network is the Computer' tagline was a good articulation of what Sun's technology was about, but this one is more business-oriented. It's taking the same idea, but putting it in value terms," Ward-Dutton said.
While the original moniker attempted to imply that Sun's products reduced network risk, the new version is a "logical progression" in Ward-Dutton's view because it suggests that "Sun will enable customers to use the network to share information and collaborate".
"During the dot-com boom, all the talk was about networks, and networks are important again now, but in the context of collaboration. The hot topics these days are Web services, VoIP and the like, which is all about taking stuff built in the dot-com boom and building new applications on top. And Sun is trying to re-engage with that," said Ward-Dutton.
To back its new message, therefore, the company is likely to cite its decision to open source Solaris and create the OpenOffice.org project, its contribution to standards work around Web services and XML, and its big focus on utility computing, which enables customers to share computing resources located both internally and externally.
"It's quite a nice way of describing the many things that Sun is trying to do in one simple way. But re-branding is never enough to turn a company around. You can't just stick a sticker on and expect change," Ward-Dutton said.
As a result, if thee-branding is more than just cosmetic, it could present an opportunity for Sun to demonstrate that it is more willing to collaborate internally and with partners. "If so, the move has the potential to make a significant difference because it will signify an attitude change," explained Ward-Dutton.
Mike Thompson, a principal research analyst at Butler Group, believes the move is a natural extension of moves that Sun has been making over the last 12 months, including the promotion of Jonathan Schwartz to president from his former position as head of software.
"It's the manifestation of a new breed of executives at Sun and probably indicates that Scott McNealy [Sun's chairman and chief executive] is relying more on the professionals around him than in the past. The company's had losses of about $4bn over the last two years, so the new executives and new direction are perhaps an indication that Scott recognises the shareholders won't remain patient for ever."