Deciding to focus development investment in power-efficiency, data storage and open systems is paying off for Sun Microsystems, as these issues gain importance among local and international businesses.
This is according to Jean-Paul Bergmans, president for Southern and Eastern Europe, Middle East and Africa, who says the company ploughed millions of dollars into research and development following the dot-com crash.
"Three years ago, we decided to specialise in technologies that drive efficiencies. Fortunately, we have many people with vision within the company and most of the research areas we chose to invest in have worked out for us. Today we are seeing the benefit of this research as power usage, application interoperability, and data privacy, storage and access increasingly feature in boardroom discussions.
"In addition to the significant investments in R&D, the company also instituted better financial, operational and strategic discipline within the company. This meant we had to find the proper balance between employee initiative and process adherence, as well as closely evaluating the innovations we chose to pursue. Now we're in the sweet spot," he explains.
Local concerns
Although Bergmans says Sun's local office has performed well under the management of regional director Vito Bonafede, he notes the company still has some concerns about the South African operating environment.
He says the skills shortage is SA's biggest problem. "The country has got to put more effort into creating skills. If it does this, the country will be able to develop and export products rather than export its intellectual property alone."
Equity issues
As for the country's black economic empowerment requirements, Bergmans says the parent company is working hard to understand the issues around equity and hopes to have an answer soon.
"We have to consider our options very carefully. What we do in SA will set a precedent for the way we choose to operate in Africa and will have ramifications on the way we do business throughout the continent for the next 10 years."
Bergmans believes multinational companies should be encouraged to drive investment back to local partners, as has been done in Russia.
"Russia has been very successful in getting multinational companies to invest in local partners and help these to achieve real growth. As a result, it has been the local businesses that have been developed rather than just that of the international company. Of course, SA's [political history] means the country has issues other than economic growth to deal with and we are endeavouring to be sensitive to the unique requirements of the country."
The local company, says Bergmans, is a key focus for Sun as it has great potential and provides a basis for expansion into neighbouring countries.
"We believe SA still has significant growth to offer; we just need to be more strategic in our operations and approach. We are looking at the rest of the continent for expansion opportunities, but need to ensure we have the model right first before we take those steps."
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