Sun's latest tactic - pay salespeople more

NEWS Sun Microsystems is turning to a tried and tested method to spur software sales - hard cash. The California-based company has begun tripling salespeople's commissions when software is involved in a sale. The programme is designed in part to encourage Sun salespeople who have focused on selling hardware to achieve "much greater literacy in software," Barbara Gordon, VP worldwide software sales at Sun, said in an interview. Though Gordon declined to offer specific figures, she said Sun is pleased with the incentive programme's results so far. "We have seen an increase in software sales," she said. Finding new ways to make money is crucial for Sun, which has suffered under fierce competition, a recession and the vanished revenue from internet and financial services customers. The tech giant got its start more than 20 years ago selling workstations, then adapted those products for the more profitable market for servers. Sun profited in particular from the internet spending frenzy of the late 1990s but struggled to make much money off software and storage products even during those boom years. The incentive programme shows Sun is trying to change that record. In addition to the software sales incentive, the company also offers a similar 'accelerator' for sales of storage equipment, though the storage bonus is less than that for software, Gordon said. It's a good approach, Gartner analyst David Smith said. "It makes sense that if you want to sell something, you need to [provide an incentive for] the sales force," Smith said. The only problem is that if the incentive doesn't have its desired effect, the company's failure is even starker. The program has succeeded in spurring "behavioural changes" outside the software sales force, spreading knowledge of software further, Gordon added. Sun has 550 to 600 software salespeople, about a tenth of the number of its overall sales force, Gordon said. Much of the software Sun sells stems from the iPlanet project, a sales and development partnership between AOL Time Warner's Netscape server software division and Sun Microsystems. Until a year ago, iPlanet was a division kept almost completely separate from the rest of Sun. In the last year, though, it's been renamed the Sun Open Network Environment (Sun ONE) and had its independence eliminated. One sales incentive Sun lacks is one for driving the Linux operating system into the marketplace. Linux competes with Sun's Solaris on lower-end computers, and while competitors such as IBM and Hewlett-Packard began their support for the collaboratively developed Unix clone in 1999, Sun only bowed to the market reality and embraced Linux in 2002. But while Sun takes the lead with some new technologies - such as convincing customers to move to its N1 technology for pooling computing equipment into a single vast resource - it's not taking that approach with Linux. "I don't see the need for Sun to push Linux in the market," Gordon said. "We're not going to overly emphasise it." Sun advocates building and using an "integratable" collection of software and hardware: components that comply to industry standards so that customers may swap out a Sun component and use another product with no difficulty. Sun's integrated hardware-software strategy contrasts with that of its two biggest competitors, IBM and Microsoft. IBM - the computing company with the most sprawling suite of software and hardware offerings - tends toward independence between its various groups. Microsoft dovetails its software together but doesn't mention Sun's philosophy of an "integratable" technology. Sun needs to do better with its "integratable" idea, Gartner's Smith said. "That's a great message," Smith said but he added: "I don't think they've explained it well." Now, Sun's integrated technology approach has led to a different sales approach from executives from CEO Scott McNealy on down, Gordon said. "Software is the strategic discussion that we lead the majority of our sales calls with." Stephen Shankland writes for CNET News.com.