Computer Manufacturers Shifting Their Focus to Start-Ups
Written By: R. Krause
Published On: August 18 2000
Computer Manufacturers Shifting Their Focus to Start-Ups
July Sun Microsystems, Inc. announced the iForce Startup Community, an
industry first marketplace designed to address dot-com customer requirements
through cross-market collaboration. The community interacts online through
the iForce Startup Community portal, where startups can find news, events,
interactive forums and vendor information, and where qualified startups
gain access to special offerings of industry-leading products, technologies
and services. These vendors' enthusiastic participation in the program
illustrates the dynamic growth and momentum behind the iForce Community
program announced in March 2000.
broad array of Independent Software Vendors (ISVs), Application Service
Providers (ASPs) and E-Integrators have joined forces through the community
to focus on providing startups the leveraged relationships, expertise,
and fast solution implementation vital to their success. By creating pre-negotiated
solutions and delivering them through an easy-to-access online marketplace,
the community ensures that startups adopt the right architectures, platforms,
products and services from the outset, allows them to make these critical
choices in Internet time, and frees them to focus on their core competencies.
Consisting of nearly fifty companies, the iForce Startup Community represents
the broadest cross-industry support for any startup-focused initiative
in existence today.
key component of the Sun iForce Community is the Sun Developer Connection[sm]
Startup Essentials offering, which consists of a bundle of hardware,
software, and services at discounted rates, all pre-configured and designed
specifically for startups.
iForce Startup Community serves as a dynamic forum for startups to make
connections and conduct business with community vendors. Any startup may
take advantage of the wealth of information and services Sun is making
available on the portal, such as news feeds, insightful editorials, a
startup events calendar, scheduled chats to facilitate community dialogues,
and showcasing of startups and their real-life implementations. Approved
members of the Sun Startup Essentials offering will gain access to pre-negotiated
discounted or free offerings from nearly fifty iForce Startup Community
vendors, including Sun and its strategic partners.
few days later, Gateway, Inc. announced its expansion of beyond-the-box
offerings for business with eBusiness Accelerator Leasing, a program designed
to meet the technology financing needs of high potential Internet-based
start-ups. Through the program, available today, Gateway will initially
lease computers and related equipment to help emerging businesses establish
their technology infrastructure.
Gateway eBusiness Accelerator Leasing program gives emerging companies
competitive options to build their important technology infrastructure
with a trusted technology partner, while developing a positive credit
rating. And unlike other dot-com leasing programs, Gateway's eBusiness
Accelerator Leasing does not have program restrictions or membership fees
- only credit requirements.
eBusiness Accelerator Leasing complements the relationships emerging dot-com
companies have with venture capital and lending firms. Gateway's leasing
program gives customers greater flexibility to expand their technology
infrastructure, while preserving other funding for business growth and
development. Gateway has teamed with eLease to administer billing, collection,
tax and other infrastructure support services under an ASP arrangement
that provides a flexible and quick time to market solution for customers.
Although this is not a sea change, it does mark a change from "traditional"
business models, where a lot of effort was put into winning big contracts
with major customers. The value of winning the big ones has not diminished
(that's what pays the bills, after all). What the manufacturers are doing
is placing bets: if the startup tanks, the manufacturer loses a little;
if the startup becomes the next Cisco/Microsoft/what-have-you, then the
odds of repeat business are greatly increased.
intrigued by the differing approaches to the problem: Gateway is providing
an alternative means of funding for the computer hardware/software and
services (their own products, of course); Sun is providing (among other
things) prepackaged solutions at relatively low prices.
providing turnkey solutions, Sun's "iForce" should help them extend their
leadership in Web infrastructure. Start-ups who build their infrastructure
around Sun/Solaris architecture are less likely to switch brands. (There's
only one Sun, there are plenty of Intel-architecture brands.)
of the competition present in the Intel-based market, Gateway needs to
take a slightly different path to brand loyalty. Although Gateway produces
quality desktop machines, Gateway servers (a key part of the infrastructure)
are barely on the market share "radar screen". If Gateway takes equity
positions in the companies they're funding, brand loyalty becomes less
an issue of product specs, and a little more a "management decision".
(We are not implying that Gateway will try to muscle companies to buy
their stuff; what we envision is the start-up's management saying "Why
should we change vendors and risk compromising our relationship with Gateway.)
companies have already implemented variations of what we see here: HP
and Dell have implemented small business service/alliance programs, and
Compaq appears to be ramping up similarly. As margins on hardware shrink,
we expect services of this nature to become a bigger part of vendors'
We feel either of these programs deserves serious consideration by startups.
Although neither program is without risk, they are relatively low-cost
ways of getting up and running.
you have already decided on an architecture (Intel vs. Sun), skip to the
end of this section.
The OS-agnostic users will have to decide how much/little hand-holding
they want, almost in the sense of a la carte vs. full dinner.
that need turnkey solutions, as opposed to in-house development, will
probably find Sun's offerings more to their liking. Of course, this means
committing to non-Intel architecture, something which may not be palatable
that already have a well-defined infrastructure strategy, and already
have their business applications in place (or ready to go), may prefer
the Gateway approach. This means an Intel-architecture infrastructure,
since Gateway currently has no real Unix message.
believe both programs can provide significant value to the customer, it
comes down to the customers deciding which architecture and what their