Finally. Seven years after Sun India was set up, chairman, president and CEO Scott McNealy has decided to come a-visiting. In a three-day whirlwind tour starting March 20, he will meet customers, partners, industry associations like CII and Nasscom and, of course, Sun’s own software developers.

This is not a new geography for McNealy. He’s been to Asia before—to China, Tokyo and Singapore. But this is the first time he’s chosen to stop by in India—the third stop in a four-nation tour that covers China, Singapore, India and Australia, in that order. It was high-time anyway. Most of McNealy’s peers have been here long before him. And of them—William H Gates—numerous times.

His agenda? It’s certainly not about giving $100 million away for AIDs in India. Or $400 million for sundry education initiatives. Apart from the fact that Sun doesn’t have that kind of money to give away, McNealy is not known to work that way. The reason he’s coming now is simple—Asia is the company’s fastest-growing geography and Sun sees China and India together as a billion-dollar bet. So the chairman is coming here to do a hard-sell—to customers, partners like Wipro, Infosys and TCS, and to the SW community.

Besides, Sun recently launched a plethora of products that it hopes will take it into the new post-recession age. Scott will sell that too. Says KP Unnikrishnan, Sun India’s country manager (marketing), "Scott’s trip is to communicate our network computing strategy, promote Sun as a thought leader in the region and the world, and to meet up with Sun customers."

Not a nice recession...
A hard-sell in this region is going to be increasingly important to Sun, which has had a worse recession than most. Sun’s first quarter results this fiscal (ending September 2002) weren’t too encouraging, with the company posting a net loss of $111 million on revenues of $2.7 billion. While revenues for Q2 increased slightly to $2.915 billion from Q1, profitability remained an issue. The company posted a net loss of almost $2.3 billion. (This included a $2.125-billion writeoff on impairment of goodwill and intangible assets). Partly to offset that, Sun also announced late last year that it would be cutting 4,400 jobs, in addition to the 3,900 it cut a year ago.

In addition to lower profitability, Sun’s strategies have, in recent times, raised questions about the company’s future prospects—will it go the Silicon Graphics way (niche but small) or will McNealy manage another major turnaround as he often has in the past?

Sun believes he can. And a key part of that turnaround is based on the company’s software strategy—specifically SunONE (Open Net Environment) and N1. While software still forms less than 5% of the company’s revenues (and approximately 9% of its bottomline), the company hopes that will go up to about 9% of the topline in the next two years. While that is not a major cut, it will give the bottomline a boost that the company badly needs.

The India angle
And that is partly where India is likely to play an increasingly important role in Sun’s long-term prospects. Sun’s 600-strong India Engineering Center already does major work on SunONE. It was responsible for the development of Version 6 of the SunONE app server and has done a large chunk of the work on Version 7, along with the Bay Area center. After Sun started showing interest in Linux, the India center is already delivering parts of the SunONE software stack on Linux, including the app server, Web server, portal server, identity server and directory server. This is in addition to the third-party tieups the company is exploring for Linux. India’s developer base is something that McNealy will definitely be eyeing. At the moment, Sun’s development center in India is smaller than IBM’s but larger than Microsoft’s. The company is committed to significantly increasing that strength, though no timeline has been put to it yet.

In addition, at a time when Sun worldwide has been floundering a bit, Sun India has mostly had a healthy run in the past few years. Barring a drop in sales in fiscal ’01-02, along with almost all other hardware vendors, the company has seen revenues almost double in the last three years. McNealy will visit both vendors and development partners like Wipro Infotech and Wipro Technologies, respectively, (he’s scheduled to have lunch with Azim Premji) and will spend a lot of time with customers. Sun India must hope that McNealy’s visit will help boost their topline further.

Sarita Rani in Bangalore