Sun Microsystems' strategy to offer free office productivity software over the Web taps a growing user interest in hosted Internet applications.
As expected, Sun has announced that it will acquire Star Division, a California-based software company that was originally located in Germany.
The acquisition sets the stage for Sun to introduce StarPortal, a free Web-based version of Star's StarOffice suite of office productivity software, early next year.
The portal will allow users to access Web-enabled office productivity software -- including word processing, presentation graphics, spreadsheets and other office functions -- through any Web browser.
Microsoft also plans to offer its applications over the Web in the future, according to president Steve Ballmer, speaking at a press conference last week. But no time line has been set.
Sun is currently trying to sign up Internet service providers and applications hosting services to offer StarPortal applications as part of their hosted service portfolios. For instance, AT&T plans to offer StarPortal as part of its services to business customers when the suite becomes available.
Sun's goal is to promote user interest in renting core applications over the Internet, said Joyce Becknell, an analyst at Aberdeen Group in Boston. In May, for instance, Sun launched a program called ServiceProvider.Com to sell hardware, software and services to application hosting vendors and Internet service providers.
"Sun is just trying to make sure that service vendors have the tools and applications that will make such services viable [for more users]," Becknell said.
Rentable Internet applications are usually ready-made software that run on remote servers hosted and managed by service providers and accessed by users via browsers. Forrester Research projects that the market for such services will be worth $US6.4 billion by 2001.
The primary user appeal of such hosted applications is the lower up-front costs and reduced administrative hassles, said Marco Boerries, CEO of Star Division.
Sun's revenue will mainly come from selling the software support services and the large server hardware required by service providers to host the applications, Boerries said.
Sun's latest move "should really lend credibility to, and ammunition for, the service provider business model that Sun is pushing so strongly", said Thomas Kucharvy, president of Summit Strategies, a Boston-based consultancy.
"It will also make it easier for Sun to launch a more credible entry into the business client [application] market" in the future, Kucharvy added.