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Sun Introduces Subscription Solaris
cyberlync writes "Sun is planning to implement a pricing policy similar to Microsoft's recent subscription pricing plan. Jonathan Schwartz, Sun's executive vice president of software, said that they are calling this project Orion. It looks like another attempt to grab more cash in this nasty economy to me. Schwartz said that they are going to try a similar senario with linux soon as well. On a side note, it mentions some interesting things about a new desktop distro of linux."
Sun implementing Microsoft ideas?
Orion -> Onion?
Mouse powered Chips, Open source Processors and Lego
It looks like another attempt to grab more cash in this nasty economy to me.
I hate it when companies try to make money. Employees, electricity and phone service should all be GPL. they could maybe get office furniture off of kazaa.
damn economy.
1) subscription for linux copies from sub ...
2)
3) profit!
Okay, so Sun will have profit. Will they put more effort into Linux or will they try to increase profit by minimizing costs (volunteers are so cheap...)?
For some people this will be a good option and everyone looking at Solaris/SunONE licensing should have a looksee and work out which option is better for them.
In a lot of ways, Sun is the MS of the commercial UNIX world, but they have an impressive record of making contributions to the community. the most notable contribution was probably NFS, and Sun gave it away long before most of us had ever heard of the GPL. Solaris has lots of goodies in it, obviously including great NFS support, but also pleasant standardisation and maturity, which Linux still somewhat lacks. Solaris is also rock solid. Sure, Linux can have multi-year uptimes, but it doesn't really compare to Solaris. When you want to run a giant website with 100's of CPU's, you turn to Solaris, and you don't even care that you get raped on the price of the hardware.
I imagine that Sun is doing this because they know they won't make any money pushing beige box PC's. (SGI sure didn't.) By just selling the OS, they may not sell a ton of copies, but the profit margins on software are pretty sweet, if you can pay off the cost of development.
No doubt they have got many customers with sizeable investments developed on Sun technology, and I suppose Sun wouldn't make such hard terms as Microsoft did, but nevertheless, you can only price your way when it's a sellers market, or a really captive one. If not, your are dead meat. None of those situations currently apply. Just think it again, Sun.
Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
I don't like this move to subscription that has become popular. Macromedia also is trying to do it.
It's great for the provider - over time it makes you a lot more money, and you get a more regular cash flow. And it eases the pressure to come up with major releases. You can just make minor improvements regularly to justify the charge. Fixing bugs and security holes should not be considered a service - it is repairing a faulty product.
So as a provider, it's great. But as a customer, it's not so good - stuff basically ends up being more expensive, and you get locked in to one provider.
I think it is a development that needs to be resisted. Profit margins are far too high on a lot of software anyway. This kind of move just makes OSS solutions even more attractive.
It seems software amd hardware companies are nostalgic for the good ole days when a server or desktop had a service life of about 1.5 to 2 years due to obsolence which was in effect similar to a subscription.
Now the pace of change has slowed down and so has need to buy new systems. Companies like MS and Sun are trying maintain and expand revenue without offering any compelling reason to upgrade. So they are now "innovating" with pricing.
Remember, they are a company responsible to shareholders. Sun is tanking, the economy is tanking - what is Sun supposed to do? This shouldn't be a blame game but a step back to evaluate what Sun is doing and why they are doing it (to post a profit not a loss for starters).
We buy solars subscriptions for our low end x1 style sun boxes already. Its sold as hardware support without the hardware support but we get access to the current releases.
What I would like is a subscript deal where we get a copy of the current version (what ever it is and with all the patches applied) when its shipped. I only want the install cd, I don't need the other cd's they like shipping out. Right now it costs me about $100 to download a cd at current rates and it it shouldn't cost Sun Australia more than about $20 to send a real CD to me. I only need one media subscription so this is different than the license issue.
Sun's really got to rethink the way it does business, i think. there's an interesting article at NYT on the topic. There was something in there (that I can't find now to save my life) about how Sun was going to do subscription-style pricing, but at a rate more competitive than Microsoft.
;)
There's also interesting discussion in there and here about the company's dependence on proprietary, expensive hardware in today's world of home 192-node beowulf clusters.
Sun has always provided the OS for free on lower-end systems, and charged on the high-end based on the number of CPUs. All the other high-end system manufacturers do this, except for the free part.
.. I wish MS would follow this model.</rant>
Now that Sun is offering Linux, they will need a way to break out the costs, so that customers that prefer Linux might be offered a price break over customers that prefer Solaris for specific tasks. For instance, webservers and app servers might see no real need for any additional costs for Solaris, but a 75 CPU database server might want the additional features.
This method also provides the capability of pricing support appropriatly. I know, you MS people might not be familiar with this concept, but Sun has been providing support for their OS for years, and not charging by the hour when you call with a problem. Sun bundles OS and hardware support into one number for low end systems. Again, by breaking the pricing out, different support costs can be offered for the different OSes.
Sun support has always provided, cumulative patch sets that can often be applied without reboots. <rant>I built a W2K box yesterday and had to boot over 7 times after the initial install of the OS as I applied various patches. It took me most of the morning to get all the patches installed. I pay for this support so that I can call up a technician that has the resources available to answer my questions. Sheesh
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
Since I can think I wondered why software is treated so differently than other products. It would make sense to forbid this by law.
For basically the same thing, e. g. WinNT Workstation and Server, which differ in 3 reg keys, they charge different prices, and it's said to be illegal to change this three keys. This would be the same if a car manufacturer would forbid you tuning your car!
Also this license crap (fortunately here in Germany they don't apply with standard software), nobody would accept any license bullshit when buying a car that would e. g. limit the persons in the car to two (in comparison to "1-2 cpu only"), but for software, nobody seems to care.
Kosi
1) identify need for tool
-- reliable hardware/os/software
2) create tool - utilize feedback from 'Net
-- sun gear, solaris, sunONE, linux, sendmail...
3) distribute tool - the more users the better
-- hardware costs quite a bit however, 20$ for distribution is OK by me. free sendmail download works for me. same for linux
4) provide OPTIONAL contracted services - support, customization, extension, integration
-- businesses need a way to guarantee their problems will be fixed and their special needs met, all in a time frame that does not impact their business. Your TOOL is not their business. Much as making a mitre saw is not part of a master craftsman's business. Some shops want a company to "own" the product they use. They need to shift the liability so they can concentrate on their business. That is why sendmail.com, redhat.com, etc. work
5) profit
-- business will pay premium for said services if they fulfil their need. Thus funding further R&D
Sun, sendmail.com, redhat... I know there are others out there that are giving away the "product" because their business is in the services - support, customization, extension, integration.
Look at the game console space.
The money is in the software not the hardware.
people are going to buy one console, and a handful of peripherals. They are then going to load up on the software.
It therefor makes more business sense for a company to give away the console (sell at cost) while building up a services group to provide the software, suport, and extensions to the original console.
First ID the need and fill it. The rest will follow.
Do not go the MS way and try to make all your cash up front OR make licensing the "tool" prohibitively expensive or illegal.
Encourage people to think of more ways to use your tool. The Internet was developed as a way to get noise data from atlantic to pacific. It was "released" to the public to help it grow faster.
Build it and if it fits a broad enough niche it will grow. As people invent new ways to use your "tool" the tool will begin to self evolve.
The more you give, the more the users will give back.
comment directly in my journal
Check out the guy's presentation:
Jonathan Schwartz presentation
Page 23:
All software will move to one distribution, and three licensing models - Traditional, Predictable and Metered
So comparing what Sun plans to what Microsoft has already done is rubbish.
You can buy non-subscription from Microsoft too. It just costs more. I'm sure the same is true of Sun.
There's another side to this whole subscription issue - or 'metered billing' as it's referred to in the article. The industry is trying to steer us towards a subscription rather than purchasing model - i.e. you pay for Windows by the year, rather than buying it outright. In the case of operating systems and server apps, this equates to more revenue for the vendor and a more stable long-term business model - but what about desktop applications?
I'm primarily an ASP/.NET coder, but I do the odd bit of content creation - mainly images and animations for web sites. I run my core apps (OS, email, browsers, text editors) every day. About once a week, I'll fire up Corel Photopaint for an afternoon or so to make up some buttons or something. I use Microsoft Access for two days every quarter, to perform updates to a clients' database.
This means over the course of a year, I use Photopaint for about two hundred hours and Access for eight days. Yet I (or rather my employer) has paid the same price for these applications as someone who uses them all day, every day. There are applications - Photoshop springs to mind - which I don't use at all, because they wouldn't get used frequently enough to justify the cost of the licenses. But if we could pay for these apps on a per-usage or daily basis - actual 'metered billing', the same as water or electricity or bandwidth - they'd become cost-effective. Not to mention the vast number of people who just pirate applications 'cos they only use them occasionally and they're not prepared to pay for it.
Ok, this is highly unlikely because it means less money for the software companies, and if open software continues to improve as it has in the last few years, it'll be redundant before long anyway. But it would make an interesting angle for companies trying to convince their users of the merits of the subscription model.
-- Open Source: It's mad, but you don't have to work here to help.
From the article I got the impression that they are going to merge their SUN ONE stack with Solaris and bundle the whole package as the 'OS'. This idea has been touted previously and greeted with some scepticism as a feeble attempt by SUN to 'win' application server market share from the big boys and drawn comparrison to the usual Redmond type ploys.
Mad Hatter would seem to reinforce this as an attempt to retain workstation market share rather than an attempt to compete directly with MS on the average desktop by delivering the whole sun development package at a stroke. Its a risky strategy though. Existing manufactures like Dell and HP will murder them on hardware pricing and with a bunch of Linus distros to choose from what makes the Sun one a compelling sell ?
Do not try to read the dupe, thats impossible. Instead, only try to realize the truth
What truth?
There is no dupe
Sigh,
Companies can't resist the temptation to seek out money for no effort.
I can understand the logic of buying things. I give you money, you give me product or service, I get value.
However, the logic of subscriptions for software is beyond me.
I give you money, you give me product. I use product and get value. Then I give you more money for telephone support, and you give me telephone support. I get value. So far so good. But now suddenly you ask me for more money or else I can't keep on using what I have already bought. You don't have to do any more work, I don't get any more value but yet money changes hands.
And this is not just payment by instalments. If I can't pay the price up front, then by all means do me a deal where I borrow the money and pay quarterly.
These business models cannot survive where the users have a choice.
It is true that subscription can be a blessing for a provider. But it can also turn into a curse for both provider and customer.
I once (ca. 10 year ago) worked for a firm that sold a program for a yearly subscription (you didn't own the program - you leased the right to use it). It removed the focus of the management from the product to a degree were it almost wasn't supported anymore. There wasn't any pressure from dismissing sales as we lived almost on subscribtion alone.
But once a year a month or so before next year subscription was due I was told quickly to prepare a new release with the sole purpose of giving the impression that our customers did get something for their subscription. Management didn't care what it contained as long as I didn't take to long.
AFAIK most of our customers didn't use the upgrade because it didn't really add anything worthwhile anyway.
The way I see subscription-based software working is that there's an introductory price (say, $150) for the basic OS and a year of updates. After that year is up, you can choose to continue the subscription at a maintenance rate of $50/yr, or you can stop maintenance and not get any updates. You still have a valid license for the OS, you just can't install any new updates. Once you go off maintenance, you need to pay the full introductory price to get back on.
Everyone wins in this case: OS vendors get a steady stream of income, users of current PC's get timely updates for not much more than they pay now for OS updates, and users of older PC's don't have to pay a yearly tax just to run an outdated OS.
If Apple had pitched .Mac this way, I might have bought it. (With the extra stuff .Mac offers, it would have to cost a little more, of course).
Of course, this plan will never work, because software companies are not looking at subscriptions as a way to charge the same amount but even out their cash flow. They are looking at it as a source of revenue growth. Which means that instead of $150 and $50/yr, which is closer to what they get now ($150 every two or three years for the major OS update) we'll see more like $300 and $20/mo. And that would be bad.
Of course, an ideal software subscriptions model should be done for the customers, not against them, that is :
Ciao
----
FB
You know, many of you may find this hard to believe, but a lot of big companies actually want a subscription model for their software (and increasingly, hardware too).
It makes cost planning a lot easier and moves big purchases off the balance sheet and onto the P&L. Companies want to know how much something will cost over a period of time - subscription gives them that. Buying the software up-front requires irritating amortization and depreciation models, and decisions on the lifetime of the product and what any upgrade cycle will be. CFOs like monthly expenses more than big capital purchases.
IBM are leading the charge towards "utility computing". You can buy UNIX boxen from them with spare CPUs, where you can ring them up and ask for more processing power for more $/month. They want their software providers to follow suit and, for example, allow users to just increase their application server subscription to another processor on demand.
Sun are just following the market.
Sun also will continue to offer its traditional per-CPU pricing model for its Sun ONE stack and Solaris, Schwartz said.
Since they're now evidently offering companies a greater choice in how they're going to get their product, there is a very big difference between what they're doing and what MS is trying to do. As I understood it, MS was offering NO choice as to pricing model, which was made more onerous by the great leverage MS has over its customers as a result of limited choice in the Windows world.
The fact that Sun customers will have a choice of pricing model means Sun's not trying to bulldoze anyone, and should be praised instead of vilified as the poster tries to do, since subscription plans can make very good sense for some customers. Extending the range of choices is never a bad thing as long as the set of choices always includes the choices you had before.
... Well, at least it's not necessarily about making more money. It's primarily to regularize cash income for companies who have had a cyclic stock price tied to their release cycles.
In fact, they want to do this so much that they'll sometimes make that option more attractive than purchasing: they're willing to sacrifice a little income if it means it's going to be flowing regularly instead of in chunks.
Cynic? Maybe he's never managed a data center...
What the article doesn't describe is that Orion is a *huge* improvement for some managers of data centers. Knowing your monthly rental prices ahead of time makes budgeting much easier, which is a very big deal in some companies.
It also emphasizes Sun's broad idea of services as a utility. Ideally a CIO/CTO can pay a monthly fee and get everything: rental software, scalable hardware, technical support for anything that comes up, and consulting services on retainer.
Disclaimer: I worked for Sun and strongly advocated this kind of metered billing. I worked for a big data center before Sun, and saw firsthand that for my CTO budgets I needed monthly predictability more than I needed low prices.
Cheers, Joel
1- This is not Sun changing the pricing for Solaris. Nowhere is it stated that Sun will stop issuing/honoring the Solaris RTU for systems with less than four CPUs.
2- Orion will not just be selling Solaris, it will "build all of Sun's software into the Solaris OS and offer a yearly subscription for Solaris, Jonathan Schwartz, Sun's executive vice president of software, said at the vendor's Worldwide Analyst Conference here."
That means no more licensing headaches for people using Sun's software for Solaris. Just one subscription for the directory tools, the management tools, etc.. Orion will make business with Sun easy for companies with money to burn and no time to spend dealing with it, and Sun has plenty of customers like that.
The only problem I see with Sun's Project Orion is that the heat and blast from the nuclear pulse propulsion drive will make it hard to administer the system effectively.
"I thought I could organize freedom. How Scandinavian of me."