Sun Exec: Reorganization All About Integration

SAN FRANCISCO (05/05/2000) - Sun Microsystems Inc.'s reorganization of its businesses announced yesterday represents a major push by the U.S. hardware and software to more closely integrate the company's operations, according to a Sun senior executive. The move is also designed to better anticipate the future needs of Sun's customers, he added.

The vendor yesterday announced three major alterations to its current business setup -- the establishing of a single Global Sales Operation, the merging of Sun's computer systems and microelectronics groups into the Systems Products group, and the creation of a new customer advocacy unit -- all designed to come into full effect July 1. [See "Sun Reorganizes to Focus More on Customers," May 4.]"Sun's biggest asset is that we're always trying to improve on our processes," John Loiacono, Sun senior vice president and chief marketing officer, said today in a phone interview: "We don't want to become the next DEC (Digital Equipment Corp., which after losing its business focus was acquired by Compaq Computer Corp.), we want to morph our business into the next generation."

The reorganization will give Sun a "better face" to its customers by helping to improve the firm's external processes as well as internal company processes, Loiacono said. He pointed out that Sun executives' bonuses are already tied to two indices -- a customer loyalty index and a customer satisfaction index. The company also has an existing executive advisory council made up of Sun customers around the world who give the vendor feedback about its performance.

However, he added, "There's never been a customer who'd say you can't do something better."

Sun is making two major bets on trends in the IT industry -- "massive scale and continuous real-time," both of which require integration, Loiacono said.

"We need to have extreme integration between hardware and software components and the services applicable to both components," he added.

Massive scale relates to the increasing pressure on hardware to act as a key storage medium for information coming from a wide range of devices including PDAs (personal digital assistants) and consisting of a variety of data types -- video, voice and rich graphics, Loiacono said. The yet-to-be-achieved holy grail for computers is continuous real-time -- the ability of computer hardware vendors to be able to offer the same level of performance every time a user turns on their computer, in the same way that users always expect to get a television signal whenever they switch on their TV, he added.

Yesterday's announcement of the formation of Sun's Systems Products group will help the company in achieving a "seamless integration" between its chip and system operations, Loiacono said.

Sun's new customer advocacy unit will focus not only on ensuring companywide product quality and availability, but will also be concerned with customer satisfaction and loyalty initiatives, the Sun executive said. Additionally, the customer advocacy function will push the Six Sigma quality satisfaction program throughout Sun, he added.

Motorola Inc. and General Electric Corp. have been evangelists of the Six Sigma quality improvement methodology, which aims to lowering the amount of product or service failures within a company to an insignificant level. Reaching the Six Sigma level of failures is approximately equivalent to 3.4 defects per 1 million products, Loiacono said.

Sun, in Palo Alto, California, can be reached at +1-650-960-1300 or via the Internet at http://www.sun.com/.

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