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

Just like Debian!

[Anonymous Coward]

'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.'

Well, Debian charges $0 an employee for a single package that includes an application server, a Web portal and security software, among other components -- all of which Debian 'executives' say will work together in a more integrated fashion than they did previously.

Glad to see Sun is catching up, finally. They just need to offer a better discount!

You can't make money by giving stuff away

[192939495969798999]

I think Sun may be one of the last companies to realiza that giving a product away doesn't make you any money. I work for Sun, and let me tell you, they are a great bunch of engineers. However, their ability to turn those awesome engineering projects into cash is limited at best. Perhaps if they start charging some serious money for stuff, then things will change. Let's hope that Sun can get back on track!

not as MS-ish as it sounds

[jbellis]

We're all familiar with a certain Redmond-based company's efforts to extort more money from corporate desktop clients with a strategy like this. But, if you read the article, Sun isn't forcing you into this if you don't think it makes sense for you:

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.

All Employees

[RazzleFrog]

What's interesting is that it is based on the number of employees per the company's annual report and not based on actual users. I would imagine that companies with large workforces that don't actually go anywhere near a computer would lose out on a deal like this. Manufacturing companies come to mind. I work for a company of 1700 employees. That means $170,000 in license fees. Anybody know what that would hav translate to under the old scheme?

Re:All Employees

[bios10h]

What happens if a manufacturing company (or even a computer-related company) decides to split the "IT department" off the company to create another company that will offer IT services for that manufacturing company? If your IT department was 1/100th of your company, you just got Sun license for 1/100th of the price... maybe their "license" will cover this kind of practice but if not, it would be easy to do.

What is the "system"

[mentin]

What is the "system" described in the article? If I bought it, and found its performance is not enought, do I have to buy another one at the same $100 per employee? Now it looks more like any arbitrary number times $100 per employee pricing.

Or do Sun believe they scale infinitely?

Re:What is the "system"

[pmz]

What is the "system" described in the article?

Well, Sun is announcing their Java Desktop System (formerly Mad Hatter) today. It looks to be a $100/year deal. It includes a Linux distribution, GNOME 2, StarOffice 7, Mozilla, Evolution, J2SE 1.4.2, Acrobat Reader, browser plugins, etc. The cost also includes Sun support, it appears.

Try to get something like Java Desktop for that price from Microsoft. This is exactly what Sun is going after. One of Sun's executives said they'll undersell whatever Microsoft bids in an interview a while ago. With that attitude, they'll be sure to pick up a few customers (perhaps more than a few).

JBoss and Redhat

[linuxislandsucks]

JBOss and RedHat charge zero..just fees fro support services..

Look at Frod they did not choose Sun, why?

Will make it hard for Sun to get in the door

[bartash]

What happens in an enterprise when a department wants to try out SunONE App Server? They have to pay for their whole company? Easier to get JBOSS/Weblogic/Websphere.

Of course when Sun has got in the door it is easy for departments to choose SunONE App Server becasue it is essentially free.

Only and underdog could use this pricing strategy

[gojomo]

If Sun were ever to be in a dominant market position, this sort of "bundling" would likely be considered actionably anticompetitive, like the MS OEM licenses which charged PC makers for every PC shipped, whether it had an MS OS or not.

Re:StarOffice price increase

[Sylvius]

I remember reading an interview with Scott where he said giving away StarOffice was killing it. CIOs were too nervous to do company-wide transition to a free office suite because they feared that Sun could just abandon it/stop supporting it on a whim. Hence, the spin-off of OpenOffice. By charging an nominal amount (comapred to MS Office) for StarOffice, Sun has given it a "corporate legitimacy" that gives IT departments reassurance that Sun is committed to supporting it.
They are both great products, they are both far cheaper than MS Office, but they appeal to different groups with different needs, so one won't kill the other.

Far out!

[r_j_prahad]

This could be great news for my 501(c)(3) non-profit customer who technically has zero employees; there is nobody on the payroll, they are all volunteers by definition. I haven't read the whole of the offer yet, so I do not know if they are giving Solaris away for free or not. And anyway my non-profit site is happy with Linux, so free Solaris is not going to save them an appreciable amount of money. But when your revenue stream is primarily pocket change, every penny counts.

If RIAA ran tech licensing

[computerlady]

Everyone is quick to say "won't work" about Sun's proposal. But just think what the world would be like if RIAA ran things - if there were a "Technology Industry Association" (TIA) levying fees on behalf of all the tech companies.

Every living human would be assessed $500 a year for tech use. Then charged a royalty everytime he turned on a machine of any type, opened any software, printed, etc. Of that, somewhere between 1% and 5% would be divided up amongst all the software companies and the rest would be used by TIA to sue people who looked over someone's shoulder to read a website or xeroxed a printout.

Enough to give one a small stroke, eh?

Sounds like a gold mine to me...

[cybrthng]

Coming from a sysadmin trying to manage an infrastructure, a turn-key solution like this from sun is a HUGE bargain.

We pay more in PER USER fees for a standard Application server environment than what Sun wants for the entire "shebang".

For small businesses who focus on unix solutions i couldn't imagine a better way to "enterprise" your business.

Pushing this will push java, will push sun hardware, will push sun certified solutions, will push logo branding, will push certifications and that will push the company forward.

PS, I do have a few V880's, 280r's, Netra X1's, V240's and lots of other sun equipment. So this is good news :)

Re:Easy solution?

[yintercept]

Adding an extra hundred dollars on to the price of hiring employees will increase the disincentive for hiring employees. The US Tax and Workers' Comp systems are renown for heaping disincentives on hiring. By heaping all sorts of costs onto hiring people, the US economy does a great job of making the process of hiring people painful. I am surprised that companies still do it.

The pricing model will be great for companies with extremely heavy information needs. It will be lousy for companies that hire a large number of non-IT workers such as construction, transportation, food...

I've always disliked these sales that were dependent on factors not really that related to the item being sold. But it will be interesting to see how the product fairs.

The site didn't mention international pricing. A hundred dollars a seat will be a tough sell in countries with a low earnings per capita. I always hate these pricing models that are based on something different than what is being sold because they tend to create an inequity

what about contractors?

[rumpledstiltskin]

Anyone who's worked for Dell knows that anyone in a grunt position (tech support, sales, customer support, etc.) starts out as an employee of a contracting company (these days it's Spherion). do these employees count? they're not employees of dell (for example).

Re:So let me get this straight....

[pmz]

I'd have to pony up $100 to Sun for him because he's an employee? No thanks.

For server software, that janitor uses it indirectly through HR, Payroll, and Management and directly if he uses a web browser to pull up his latest benefits information. Sun's pricing doesn't sound so nefarious after all.