Sun and AOL Name Alliance Leaders

Sun Microsystems and America Online have announced the executives who will direct an alliance offering e-commerce products and services. But an analyst says the two companies are 'not equals and they won't perceive each other as equals. This will probably become a hotbed of discontent as the project goes forward.'

Sun Microsystems and America Online have announced the executives who will direct an alliance the two companies are creating to offer e-commerce products and services.

Mark Tolliver, former president of Sun's consumer and embedded division, will serve as president and general manager of the alliance, while Barry Ariko, a senior vice president for AOL's new Netscape Enterprise Group, will be executive vice president and deputy general manager.

Steve Savignano, formerly senior vice president and general manager for e-commerce applications at Netscape Communications and now an AOL senior vice president, and Stuart Wells, Sun's vice president for its network software group, will both be senior vice presidents for the alliance.

Announced in November 1998 at the same time that AOL revealed plans to merge with Netscape, AOL's alliance with Sun aims to provide turnkey e-commerce solutions, modular software flexibility and consulting services to companies that want to do business on the Web, the companies said in a joint statement. The alliance was formed under a contractual arrangement in which both groups will provide resources, said AOL spokesman James Whitney.

"The alliance team we've selected has the right mix of experience and skills to lead the industry in e-commerce solutions for businesses competing in the 'Net economy," Bob Pittman, AOL's president and chief operating officer, said in the statement.

"We're strengthening our ability to provide development, professional services, sales and support, and as we do, it's our goal to be an even stronger partner to our current and new customers worldwide," Tolliver said in the statement.

Analysts gave the arrangement varied reviews.

"Alliances at this level have not worked well in the past," said Rob Enderle, with Giga Information Group Inc. in Santa Clara, California.

Both companies appear committed to the move, "but you need somebody to drive the direction," Enderle said. "They're not equals and they won't perceive each other as equals. This will probably become a hotbed of discontent as the project goes forward."

Also, the companies have conflicting goals in the long term that could pull the alliance apart, he said. "The biggest conflict is that Sun is in the hardware business," Enderle said. "It wants to see things raise hardware revenues. (While) AOL wants to provide services so you don't have to buy as much hardware."

This type of conflict tore at the Sun-Oracle Corp. network computer (NC) alliance, Enderle said. "Oracle wanted NCs to be cheap, below $500, and rely on the network, while Sun targeted NCs at around $1,800."

But James Murray, an analyst with International Data Corp. in Framingham, Massachusetts, said both companies could profit from the alliance.

"There are places where they are very complementary," Murray said. "(AOL's) Netscape has very strong e-commerce applications. Sun has terrific sales, distribution and good relationships with major constituents -- in other words, with the customers."

Also today, AOL announced that it was reorganizing into four different product groups as a way to integrate Netscape. The Netscape Enterprise Group, whose executives will be working with the AOL-Sun alliance, is one of the divisions. [See "UPDATE: AOL Reorganizes to Fold in Netscape" March 24.]

AOL, in Dulles, Virginia, can be reached at +1-703-448-8700, or at http://www.aol.com/. Sun Microsystems Inc., in Palo Alto, California, can be reached at +1-650-960-1300, or at http://www.sun.com/.

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