Having established its subscription-based software strategy for client and server infrastructure, Sun Microsystems is looking to extend the portfolio to take on the database and groupware markets, according to John Loiacono, executive vice president of software.

In a three-day visit to Australia to brief customers on the company's software strategy, Loiacono said there is an underserved niche in the database market.

"If you look at the spectrum of databases, at the high end you have two companies - Oracle and IBM [and] MySQL ain't even near those guys," Loiacono said. "You've got MySQL, PostgreSQL, and things like Cloudscape and Derby. People in the high-end space are saying they just can't afford the licensing fees they are charging [and] even Microsoft SQL is not dirt cheap."

Loiacono said that, because customers are asking what else is out there, Sun is taking a serious look at solving that problem by addressing some of the need in that space.

"We're not going to OEM Microsoft but we are looking at PostgreSQL right now," he said, adding that over time the database will become integrated into the operating system.

Although not prepared to reveal what Sun's software business is, Loiacono did say it was growing rapidly with about one million subscribers at $140 per employee per year as a result of the recent General Motors contract which saw more than 300,000 subscriptions added.

Telstra is also a Sun software customer with some 36,000 subscriptions.

One thing Sun isn't short of in the software market is opportunity if the more than 700 million mobile handsets running Java result in more Java Enterprise System subscriptions and Sun servers being sold at the backend.

Java Enterprise System is the stack of middleware required by carriers and content provider to deliver services for the consumer and business markets. It includes directory, messaging, identity management, and now business integration services resulting from the SeeBeyond acquisition.

"If I'm a telecommunications company, I'm terrified of Microsoft," Loiacono said. "Why? Because it is getting into my business. Our point is that we're not in that business, we're an infrastructure provider. We're not in the content business."

Regarding the corporate messaging and groupware space, Loiacono said there are two parts to it - one for the client side and one for the backend.

"On the backend we are very much a player [and] our business is doing quite well in that space," he said. "We just did a several million mailbox replacement of Exchange at Verizon to our platform, JES messaging server. When you talk about the client side, the enterprise is really hard to penetrate. If you don't talk Outlook, you're in trouble."

Loiacono said with the Firefox Web browser, Thunderbird mail client, and Sunbird calendar in that space, Sun is "getting behind" the Sunbird product.

Because of the number of calendar solutions already available, Loiacono said Sun would rather support Sunbird than build its own.