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

OMG!

[Anonymous Coward]

This is horrible! It will never work! This is the worst thing to hap....oh wait, you said Sun, didn't you? Thought it was MS, never mind, my bad. ;)

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.

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

[OscarGunther]

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.

No problem. Companies in your scenario would opt to use traditional pricing instead. Sun is making a statement about its desired role in the IT food chain (as an integrator), without relinquishing its position as a parts supplier.

I can see how headcount pricing would encourage a company to move everyone onto the platform. As long as you're paying for it, why not have everyone use it and bring down the per-seat cost as close to $100 as possible? And the price point presumably undercuts Microsoft's bundle. So, IT wins by reducing the cost of infrastructure and Sun wins by increasing revenue and market share.

Anyway, that's Sun's story. It's true, as someone else noted, that a Linux integrator can offer the same stack for $100 per seat less than Sun. I imagine Sun's response would be that (1) they're stack is better integrated than the comparable Linux stack and (2) they don't have an ulterior motive in trying to sell you consulting services for support. (Those of you who deal with Sun can tell me if the latter point is accurate.)

Re:Sun needs your mon

[molarmass192]

I hate to break it to you but if Sun had imposed runtime license fees on Java, it would have died a quick death from the start. Sun does make money from Java and it's primarily from certifications to use various Java labels like "J2EE" and "Pure Java". They also make money on books and J2ME runtime licenses.

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.

Re:You can't make money by giving stuff away

[tedgyz]

Ummmm. The last time we tried to buy some Sun servers, they were pretty freakin' expen$ive! If you aren't turning a profit off $1M systems, then you have too much dead-weight. That's what happened to DEC - too many chiefs and not enough rowers.

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:You can't make money by giving stuff away

[pmz]

If I spend $500,000 on a server with the hardware to support 4000 users, I damn sure dont want to spend another 400,000 dollars on licensing (basically nothing, air, a slip of paper).

Er, you just provided for a 4000 employee company with under a million dollars of hardware and software. What is your complaint, again?

Sun MMORPG

[CHaN_316]

Wow..... Sun is announcing a pay to play scheme. This is great! It's a MMORPG right? This MMORPG is only charging $100/year per player, which is a pretty good deal, that's only $8.33 a month!

I hear this MMORPG is also skills based and they have many classes of character you could become. You can be tech-support, end user, programmer, system administrator, clueless user, and many more! This is going to be great!