Sun Plans Equity Partner Model for Latin America in FY09 - Regional

Sun Plans Equity Partner Model for Latin America in FY09 - Regional
Christina Molina
BN Americas
Thursday May 15, 2008

Sun Microsystems (Nasdaq: JAVA) plans to launch the Sun Equity Partner model in Latin America during its fiscal year 2009, through which it would buy a minority share in a local partner that focuses on promoting Sun's solutions in a specific country, Sun's executive VP and chair of the Americas region, Crawford Beveridge told BNamericas. Sun's fiscal year 2009 begins in July. The move is part of Sun's strategy to focus investment in emerging markets such as Latin America, mostly in response to decreasing sales in the past two quarters in the US - its main source of revenues.

"In Latin America you will see three business models: one direct, one through partners, and the Sun Equity Partners model. We have already been operating [the latter model] for the past 1.5 years in Indonesia, and it works extremely well," said Beveridge, who is also executive VP for Europe, Middle East and Africa and Asia Pacific regions. One of the advantages Beveridge sees in the model is the partner's stronger commitment to Sun in the market where it operates, generating more business opportunities for Sun.

According to Miguel Martínez, Sun's Latin American sales VP, this joint venture model is ideal for those Latin American countries where Sun does not have a presence. Sun is currently operating in Brazil, Mexico, Chile, Argentina, Colombia and Venezuela. "In places where we do not have offices and typically work through partners, this joint venture model reinforces our presence and we have plans for Latin America during the next fiscal year," Martínez said.

The executive said Sun is currently in the process of determining in which country to launch the business model, and is very likely to start a pilot project next fiscal year. Martínez and Beveridge said the company is looking for IT companies with a strong presence in the countries where they operate, and with the capacity to integrate complex projects aligned with those that Sun develops in the countries where it has direct presence.

"We are looking for this type of expertise, strong companies in the IT market that have the capability to use our technology and integrate all we develop, including software, storage and systems, and even some of the know-how we have in specific services," Martínez added.