Sun sets on Solnet over cash

By RICHARD PAMATATAU

Californian technology company Sun Microsystems is smarting over former Kiwi agent Solnet's refusal to pay it millions of dollars for hardware and software.

Sun Microsystems jettisoned a 10-year reseller agreement with Solnet nearly a month ago when it announced it was opening a New Zealand sales operation.

Solnet had been the company's agent until then but that company is now a shell said to owe Sun millions of dollars for hardware and software. A new company, Solnet Solutions, has been formed, backed by Solnet's millionaire founder and chairman of the New Zealand Hi-Tech Council, Murray McNae. It has taken most of the staff from Solnet.

Rod Severn, Sun New Zealand country manager, said his company would like to have a relationship with Solnet Solutions so long as "they pay us the money they owe us".

Severn refused to reveal the amount owed but the company has registered an interest at the Government's personal properties securities register for software, hardware and peripherals.

David Hall, credit manager at Sun Australia, is listed as the interested party but the company has refused to return calls.

Mark Botherway, managing director of Solnet Solutions, refused to comment on the cash Sun was claiming and said he hoped the two companies could work together in future.

Severn said Sun had been planning to expand its New Zealand business for some time and "regardless of what has happened with Solnet was going direct anyway".

Sun has bolstered staff numbers of 30 with four sales reps and four engineers and revenue is between $90 and $100 million. For the year ended June 2002, the company had revenue of $83.1 million, resulting in a loss of $560, 847. Combined revenues for Sun and Solnet were $95 million.

Sun had 57 registered resellers but only around a dozen major partners, said Severn.

Among the big partners are Computerland, Datacom, Eagle Technology, EDS, Fujitsu, Gen-i and Unisys.

Gary Langford, Eagle Technology Group chief executive officer, said it was setting up a Sun business unit and hoped to increase revenue from the products to make up to 20 per cent to 30 per cent of Eagle's revenue.

Eagle had a 15-year association with Sun and the relationship was being extended, he said. The company has picked up eight staff from Solnet, which has shed 23 of its 120 staff since the breakup.

Botherway said his new organisation had received support from existing clients and new business had been written but details were not being disclosed. He and it will push its expertise in software and services.

In August, former Solnet national sales manager John Hanna joined forces with Computerland to establish a new enterprise division selling mid-range Sun and Hewlett-Packard systems.

Sun's worldwide revenue for 2003 declined 8.5 per cent to US$11.4 billion ($17.6 billion), leading to a loss of almost US$2.4 billion.