Sun Ponders 'Per Citizen' Pricing for Desktops

By Michael Singer

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SAN FRANCISCO -- When Sun Microsystems said it was going to charge $100 per employee/per year for its Java Enterprise platform, critics called it a radical move to win market share.

Now the Santa Clara, Calif.-based network computer maker is considering doing the same thing on more of a sliding scale for its upcoming Java Desktop System (formally known as Mad Hatter), which includes its recently released StarOffice 7 application.

Sun is not expected to deliver the Linux-based platform for a couple more weeks even though most of the pieces are already in place including StarOffice, the Mozilla open source browser, Evolution e-mail client, RealNetworks' RealONE player and Macromedia Flash. The operating system also includes Looking Glass, a new visualization interface that lets users surf around in interactive 3D-like environments.

Company Executive Vice President Jonathan Schwartz Thursday said the appetite outside U.S. for an alternative to Microsoft is "voracious".

"We are looking at relationships with government, non-profits," he told press and analysts during his Quarterly Software Town Hall here. "Pricing will likely vary by GDP. You have to charge a little differently to serve the needs of people in El Salvador opposed to Germany."

Schwartz said charging a yearly fee of below $20 per person (perhaps below $10 in high-volume situations) would be appropriate. Countries would also be able to decide how much of the Java Desktop System would be available.

The Software czar is so confident in his product, Schwartz said StarOffice would help the Java Desktop division break even in the next few weeks.

"The fact that we have reinvented the business around Java really should give you some indication of what direction we are taking this, he said. "The days of fueling industry standards for the benefit of the Internet are not gone. We will make the investments to run the long-term company."

One of those major investments is StarOffice 7 software. The standalone release (USD$79.95) hit store shelves late Wednesday and is available through retailers and e-tailers including Amazon.com, Best Buy, Circuit City, CompUSA, Frys, Micro Center, Office Max, Office Depot, and Staples. Sun has also tapped Digital River to help facilitate online sales and downloads.

Designed to compete with Microsoft Office, Sun's StarOffice is an open-source based, comprehensive office productivity suite that runs on Solaris, Windows and Linux and is compatible with Microsoft Office file formats. The platform includes word processing, spreadsheet, presentation, drawing and database capabilities. Sun said key new features include direct Adobe PDF and Flash export capabilities, Microsoft Office file format compatibility, native XML support, performance and stability enhancements, accessibility and an improved look and feel. Still, analysts say Sun has a long way to go to outsmart, outplay and outlast the giant in Redmond.

"The three most important items when competing against Microsoft Office are compatibility, compatibility, and compatibility. Enterprises need to decide how compatible is compatible enough, because StarOffice will never be 100 percent," Gartner Vice President and Research Director Michael Silver told internetnews.com. "Even new versions of MS Office aren't 100 percent compatible with older ones, but StarOffice does not support VBA macros and some other features of MS Office. A document created in MS Office and opened in StarOffice may not look exactly the same. For most users, it will be good enough, but for users with documents with complex formatting that must be retained with true fidelity, it may not be."

Silver said Sun still has some opportunities in this country, especially with users still running Office 97. Back in January, Microsoft said it would end all support for Office 97. Silver said these users will certainly feel increasing pressure to move to a newer, supported product.

In addition to its desktop product, Sun is poised to official release its J2EE 1.4. Schwartz said when the software ships next week, it will serve as the company's official Applications Server (version 8) and will officially fuse WS-I compatible Web services with the existing Java App Server. The software will include Sun's specific reference implementation, but unlike offerings from IBM, BEA or JBoss, the company is looking to give OEMs a head start on developing their own programs.

"Anybody can get our application server," Schwartz said. "Neither IBM or BEA use our implementation. We're going to do about 3 million downloads of this version putting our customers in the position of having an advantage."

On the horizon, Schwartz said Sun will make an announcement at its show in Berlin next month showing additional support for Java Cards and SIM chips.

Sun's other anticipated announcement next week will show how far the company has committed itself to supporting AMD's Opteron processors.

"Solaris on Intel, Opteron and SPARC will give us an advantage," Schwarz said. If we were to ship Opteron Hardware it would put pressure on Intel to bring out its Yamhill chip," he said. "As soon as they play that card, it makes it more difficult for them to sell Itanium-based systems."