Sun Niagra server trial making a strategic mistake

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Sun is giving away their new servers for a 60 day free trial. If you like it and keep it, you buy it from them. If you don’t want to keep it, you send it back and it costs you nothing. If you write a review (positive or negative) on your blog, they might even let you keep it for free. I don’t have a server, so I can’t review the performance, but I can review their program in general.

After seeing Marc Andreessen rave about Sun’s equipment, I wanted to try one for Tagyu. I filled out the order form on March 3. Within an hour I received an email from someone at Sun asking for a little more information from me. They’d tried to find credit ratings and such for Tagyu and since Tagyu’s a new startup, they couldn’t find anything. I explained the Tagyu situation to David from Sun and he asked if I’d like to apply as an individual instead. The entire exchange, via email, took about 15 minutes and was all over within about 90 minutes of my initial application. Clearly Sun’s serious about this program.

Fast forward to today. I hadn’t heard anything else from Sun since March 3. I was starting to wonder if there was something else Sun needed me to do. Then this morning I get an email from someone else at Sun telling me that as an individual I need to provide a credit card to secure the server. The card won’t be charged, of course, but it will be authorized for the entire amount of the server. An authorization doesn’t ever show up on your statement, but it does reduce your available credit limit until the authorization expires, which depending on the bank can be anywhere from a few days to a month or so. So for an $8,000 server, you need available credit of at least $8,000. For one of the $16,000 servers, you need to have a card with a $16,000 limit.

This seems like a bit of a strategic mistake. A lot of young startups would love to get their hands on a Sun server. And if they like it, they’ll probably buy more servers as they build out a data center. But young startups have no real credit history for Sun to check.

Not many people have credit cards with $16,000 limits, or even an $8,000 of available credit to put aside for a test buy. I realize that Sun needs some sort of assurance that they’ll get either the server back or payment for it, but there needs to be a better way.

Random Reader
March 17, 2006 5:40 PM

So... you want Sun to lend you $8K, without any ability to reclaim their asset if you dump it on eBay? If you were really serious, something tells me you'd make the credit card available. Most startups can afford $8K.

James
March 20, 2006 7:39 AM

Adam, you might want to fix the typo in the title of this post...

Adam Kalsey
March 20, 2006 9:11 AM

Random Reader: It's not a matter of affording the $8k, it's a matter of not having a credit card with that sort of available credit. I'm not suggesting that Sun not have some way of securing the delivery of the server -- as I said "I realize that Sun needs some sort of assurance that they’ll get either the server back or payment for it, but there needs to be a better way."

Stefan
March 21, 2006 2:14 PM

Adam, I don't know what went wrong in your case. I applied, got a confirmation email two days later and the machine was shipped to me six days after that. I applied as an individual, for being a freelance journalist I neither own nor work at any company. Also, I didn't have to give my credit card information (afair). Even if I did, Sun possibly couldn't have used it to authorize the money because even $8,000 for the small configuration is well over the limit of my card. But maybe it's because I'm from Germany so they couldn't check my data as thoroughly as might be possible with yours.

tmhunt2
April 6, 2006 11:23 AM

"I realize that Sun needs some sort of assurance that they’ll get either the server back or payment for it, but there needs to be a better way." Yet you offer no solution.

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