Sun Tries Subscription Software Pricing

Sequoia writes "According to this article, 'The company's new pricing model for its systems will be based on a company's employee count, as declared in a company's annual filings with government regulators. Sun will charge $100 an employee for a single package that includes an application server, a Web portal and security software, among other components -- all of which Sun executives say will work together in a more integrated fashion than they did previously.'" Sun's press information is a little more informative.

Comments

Free Reg, nooo!

[JM Apocalypse]

Sun to Introduce New Pricing Strategy for Its Software
By LAURIE J. FLYNN

SAN FRANCISCO, Sept. 15 -- Sun Microsystems, a supplier of network computers, will announce on Tuesday a new approach to selling its products and software. The company, whose network computers are based on proprietary technology, has been losing business in recent years to servers based on lower-priced personal computers.

Its executives hope that the new strategy -- substantially reducing the price of Sun's network software for many customers while simplifying the way it is purchased -- will help the company regain its diminishing market position.

The program is also central to Sun's effort to portray itself as a supplier of integrated software and computers that are more efficient for corporate users.

"We are a systems company, not a hardware company," said John Loiacono, vice president for operating platforms at Sun, of Santa Clara, Calif. "We're trying to build the best cars, not the best tires."

The company's new pricing model for its systems will be based on a company's employee count, as declared in a company's annual filings with government regulators. Sun will charge $100 an employee for a single package that includes an application server, a Web portal and security software, among other components -- all of which Sun executives say will work together in a more integrated fashion than they did previously.

The company's executives said their streamlined pricing could offer significant savings for large companies that in the past paid more under traditional pricing schemes.

Mr. Loiacono said Sun would continue to sell individual pieces of the server package, but that most companies would reap big savings from what he called the "happy meal" approach.

Sun's pricing strategy moves away from the common industry method that typically considers complex factors like the number of network processors, a network's storage capacity and even the size of a company's customer base. Those many variables can make it hard for any corporation to predict what its software licensing fee will be in a given quarter, Mr. Loiacono said. Sun's all-in-one pricing, he noted, gives corporate customers more predictability.

"What Sun is doing is being very open about what its pricing is, and that is very revolutionary in the high-end enterprise market," said Shawn Willett, principal analyst at Current Analysis, a technology market research company based in Sterling, Va. Mr. Willett said that quite often software pricing is the subject of negotiations conducted in secret. Sun, he said, is hoping that "putting everything together in a stack for one price will make more companies buy all of it."

As part of the business software package, Sun is also announcing new desktop software that allows employees to connect to the company's servers. The price for that software will be $50 a employee, provided the corporate purchaser is running the software on Sun's Java Enterprise Server system. Companies that want to run Sun's desktop software on a different server system will be charged $100 an employee, the company said.

Also central to Sun's repositioning strategy is a new version of its StarOffice software suite that features an easy-to-use interface resembling that of Microsoft Office, but unlike the Microsoft product, can run on many operating systems. The Sun software, which runs on Linux and Windows as well as Sun's Solaris, will allow word processing, spreadsheet and graphics programs to work more efficiently together, said Curtis Sasaki, Sun's vice president for desktop engineering software.

The idea is to make it easier for customers to switch from the Microsoft software to Sun's products. "We're trying to make it easy for enterprise customers to move without relearning much," he said.

Re:Free Reg, nooo!

[King Richard]

I found this article on CNN. I think anything that cuts in on Microsofts business is a good thing. SAN JOSE, California (AP) -- In a move aimed squarely at Microsoft Corp., Sun Microsystems Inc. on Tuesday will unveil a suite of software for businesses that want to dump -- or just can't afford -- the Windows operating system on their companies' desktop computers. The Sun Java Desktop system, which was formerly code-named Mad Hatter, runs on the open-source Linux operating system and includes a variety of programs that replace Microsoft's Internet browser, productivity suite and other parts of the Windows package. Sun officials say its system will cost as little as $50 per user per year and can be installed on any computer that can run Microsoft's Office 2000. The software also is designed to interoperate with Windows-based programs such as Exchange and Microsoft Office. "We're talking about a radical savings -- more than 75 percent over just the comparable upgrade cost for Microsoft," said Larry Singer, Sun's senior vice president of global market strategies. Seeking sales Sun, a leading maker of high-end, Unix-based servers, has been struggling since the dot-com collapse to bolster sales as systems based on inexpensive x86 microprocessors and the Linux operating system become more powerful and more viable. The company has since embraced both x86 chips and Linux in an effort to become a leader in low-cost computing. The move toward desktops is another facet of that transformation. But Tuesday's announcement also echoes a theme heard throughout Sun's nearly 20-year history: A desire to position itself as an alternative to Microsoft in desktop computing. Antitrust case pending In the late 1980s, Sun's 386i PC project flopped as the young company was then ill-prepared for the market. More recently, attempts to get support for its universal programming language Java in desktops have been hindered by Microsoft. In fact, Sun's $1 billion antitrust case over that matter is still pending in a Maryland federal court. Sun's latest attempt tries to leverage its Java brand, which is popular on a wide range of computing platforms from servers to cell phones but has contributed little directly to the company's bottom line. Less worms and viruses? Singer said because of Java's openness and integration with the new Sun desktop software, developers will have access to more components of the underlying software than they do with Microsoft's proprietary offerings. Singer said there's another key difference between Sun Java Desktop and Microsoft Windows-based systems. "Guess what? It wouldn't have blown up ... with the worms and the viruses" of recent weeks, he said. Sun also planned to announce a major upgrade to its StarOffice productivity suite. Singer said it would work better than previous versions with Microsoft's competing Office suite.

It figures...

[bersl2]

This ad is all over Slashdot today.

Sun Linux supports 3D Desktop a'la QuartzExtreme

[Anonymous Coward]

OSNews has a preview of Sun Linux and the info about the 3D desktop.

Re:OMG!

[Schwartzboy]

Thought it was MS, never mind, my bad. ;)

Okay, okay, just RTFB (blurb) already. Not only does it refer to "Sun", which is a bringer of light and all things good and shiny, which is obviously anti-MS, but the /. blurb also claims that the licensing is $100 per employee. If it were an MS strategy, there'd be some extra zeroes...either that, or it'd be $150 per to start and $100 per "essential patch", plus complete ownership of any and all works produced by any users, authorized or not, while using the system. Duh.
Seriously, this doesn't seem like such a horrendous idea in and of itself, but I wonder if there are any companies x such that y number of users within the organization will not want to/be able to switch, or be required to run, say, Mac OSX on lime-green iThingies because they're tied to some Mac-only apps. Would companies still be charged per-employee in that case? Still a very good deal I'd argue, if said employees were in a significant minority, but some CTO out there might not like his $50K quarterly bonus being eaten into to the tune of $699...er, $700 for that handful of marketing drones. I'm sure that a question like this will pop up eventually, or not.

I think this is great

[Anonymous Coward]

For my office this will be great being small (only about 100 people) we couldn't afford to buy things like the portal server, even at the educational pricing. With this new pricing we get the everything for only a couple grand more then what we currently pay for Sun One calendar / mail server.

Re:What is the "system"

[Anonymous Coward]

Jeez - do none of you bother to actually go to the source and find out what the deal really is? Or do you really believe that the NYT actually gets it right?

Sun is announcing TWO software deals today. The DESKTOP system is OS plus desktop suite plus integration plus comms etc.

The ENTERPRISE system is the full enterprise software stack (ALL the Sun ONE products plus either Solaris or Linux) for $100 per employee per year

Cool pricing for low headcount startups

[ubeans]

Say I want to start up a new company with two of my friends (all Java developers), and let's suppose we want to innovate and build the next killer app. First we need to write a proof of concept in order to show it to venture capitalists in order to secure an initial round of funding for the project; we need development tools, an application server, etc. but we're living off a shoestring budget.

Sun proposes a full suite of enterprise apps and development tools including limited support for 300$ per year? Wow, I'll jump on this offer, thank you very much. And when we'll sell the solution to our customers, we'll be happy to sell it along with some Sun hardware to match.

Re:Bullshit

[IM6100]

Do you think McDonalds would be paying $100 a head for every zit faced teenager asking "da ja' want fries wit' that?" in every company owned location if they want one Sun system?

McDonalds is a franchise-based system. McDonalds Corporation itself is mostly people who work in offices or warehouses. The people working at the actual hamburger stands are employees of whatever small/medium-sized company has a franchise with McDonalds.

Re:OMG!

[elmegil]

Keep in mind that it appears to cover more than just 'license fees'. The announce I saw mentioned service contracts as well. Go find a service quote from Sun and see how it compares to that $100,000.

You can't make money by making a crap

[axxackall]

Tell me about it. But they are not just expensive - they are completely unreliable. In my prev/empl company they have bought about 50 Sun computers, from Ultra-10 to E450 to E4500. 80% of them had a hardware failure at least once within two years. Not HDD, but motherboard or one of controllers. As fo HDD - there is something seriusly wrong with Sun disk arrays - two many failurs, even with IBM HDDs which work much more stable in non-Sun arrays.

I asked my friends in other companies and people in mail-lists - the situation is always the same. And it's sad to compare IBM RS6K and HPPA equipment - people working with it are surpised hearing our statistics and complains.

It doesn't have to be THAT expensive if it's not more reliable than Intel same-performance servers. Or it doesn't have to be THAT unreliable for THAT price ans speed. Hmm, i am not sure if I need faster, but still expensive and THAT unreliable servers.