Sun plays with MS puzzle

As Microsoft faces the cost-related controversy surrounding its Software Assurance licensing scheme, Sun Microsystems is hoping renewed interest in its gently priced StarOffice 6.0 suite will finally give it traction in the enterprise.

Originally designed to give Sun Solaris OS customers a free office suite that doesn't require an Intel-based PC, StarOffice is now compatible with Windows.

Meanwhile, Sun officials are hoping the recent move to add a US$75.95 price tag, coupled with liberal usage terms and improved file compatibility features with Microsoft Office, will give both small and large companies pause before automatically rolling over to the next version of Office.

"We think we are changing the economics of the office software game. For the first time people will have a real choice in what productivity software they can get on their PCs, along with being free of restrictive licensing," said Mike Rogers, Sun's vice president and general manager of desktop and productivity software.

Rogers and other Sun officials think Microsoft's controversial licensing plan is already influencing the adoption of StarOffice 6.0.

"We have seen an overwhelming interest in StarOffice generated by Microsoft's licensing program, which we think is like putting a gun to the head of a lot of folks during a very tight economic time," Rogers said.

Microsoft's Software Assurance licensing program is causing concern among many users, according to a recent Gartner report that states customers could pay as much as 107 percent more for software over the next four years under the Software Assurance plan. And 41 percent of executives polled in an April 2002 survey said they can't afford the new cost structure.

Scheduled to begin on July 31, Software Assurance replaces Microsoft's previous bulk discount programs. It will require customers to pay up front for software plus an annual fee that entitles them to upgrades for the life of a contract.

Despite the corporate backlash, Microsoft is not planning to change the program. However, Microsoft representatives admitted last week that they did not give customers enough time to make decisions about signing up for the program and did a "lousy" job of explaining the move. The company plans to redouble education efforts in the coming months.

For Sun, eating away at Microsoft's dominance on the enterprise desktop will not be easy.

Companies such as Colgate-Palmolive rely on Microsoft's ability to provide global support and standardization to their fleets of geographically dispersed PCs.

"All of our vendor relationships are very global. If you take [Microsoft] Office, for example, we look at a global deployment and we are very standardized," said Ed Toben, CIO of Colgate-Palmolive, headquartered in Morristown, N.J. "We are very big on standardization, and we think we get tremendous benefits out of that. Obviously, in the case of Office and its standardization, that keeps us staying with [the Microsoft] strategy."

Analysts agree. "The iron grip Windows has on desktops -- and they had in excess of 92 percent of all new license shipments in 2001 -- is unlikely to be loosened by Linux applications any time soon," said Al Gillen, research manager in charge of operating systems environments at IDC in Framingham, Mass.

Regardless of the odds, Sun's Rogers thinks the new price tag will draw interest, despite protest from some Linux operating systems distributors that Sun is selling open-source-based software.

"People typically looked at StarOffice in the past and said, 'It's free so why would I want to bet my business on it?' But what users will be paying for is the service and support behind the product we are delivering to them," Rogers said.

Michael Silver, a research director for Gartner in Stamford, Conn., noted that "there is a bunch of stuff in StarOffice that's really not open source; Sun licenses it from other folks, and that's another reason that Sun is now charging for StarOffice."

As for the ability of StarOffice 6.0 to blaze a trail for Linux-based desktops, Sun faces an uphill battle.

"For mature environments we don't think Linux is going to be a real popular play on the desktop," Silver said.

"In a new environment that doesn't have a large installed base yet, Linux may be attractive, but the more installed base a company has in Windows, the harder it's going to be to cost-justify a move to Linux based on the amount of money that's saved by deploying a Linux-based PC instead of a Windows one."

Also working in Microsoft's favor are companies that may remain loyal due to the expected evolution of collaborative and Web service technologies leveraging Microsoft's Windows XP operating system and SharePoint platform. Nevertheless, Sun intends to capitalize on IT executives' disquiet with the software giant.

"In order for Microsoft to perpetuate its current market value, it has to continue growing. The only way that it can continue growing is by getting into other businesses. It's either that or they grow by jacking up the monopoly rent on their products, which through their Software Assurance Program, they're doing a great job of alienating CIOs with," said Jonathan Schwartz, Sun's executive vice president of software.

Michael Vizard and Matt Berger contributed to this article. Matt Berger is a correspondent at IDG News Service, an InfoWorld affiliate.

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