One of the first users to sign a contract under Sun Microsystems Inc.'s new per-employee pricing model was Chicago-based publishing house World Book Inc. With 300 employees, the company is paying US$30,000 a year for the Java Enterprise System. World Book Chief Technology Officer Tim Hardy spoke with Computerworld US about why he signed up.
Q: Have you estimated how much you're saving under the per-employee pricing model?
It's probably 50 percent to maybe even 75 percent. We were a Sun user with a standard per-processor-type pricing model. But we have such a high proportion of users of our applications that run on Sun as a ratio to employees (that) the per-processor pricing model is a lot higher. So it was really a no-brainer for us. It also offers up opportunities for us we may or may not have done otherwise, because we're sticklers about turning a profit. So we wouldn't have done some of these things or bought some of these things if it wasn't a demonstrable money-maker.
Q: What sorts of things are you doing now that you might not have done before?
We haven't implemented anything, but certainly the decision to add portal-type features to our site was made much easier because it was already a cost savings to purchase the software we already were using in this manner. With Portal Server, we had talked about doing it, so now we'll be able to add some personalization-type functionality to our site, which has millions of subscribers.
Q: What happens when employees leave or are hired?
Ours is a three-year agreement, but the number of employees is updated annually.
Q: Can you see any downsides at all to the per-employee pricing model?
We're a small enough organization that fluctuations in the workforce isn't a downside. But it could be for large organizations -- your business changes, and you're still paying a higher rate after you've downsized. That could be an issue; it's certainly not for us. You could also argue that a downside is that it goes against a best-of-breed mentality for software. However, the pricing is so attractive that it doesn't necessarily preclude you from taking a component out, not using one of Sun's components and using a different vendor for that.
Q: And there's nothing in your agreement with Sun that disallows that?
Absolutely not. In fact, one of their selling points is that you can unbundle a component very easily and not use it if you don't want to. For example, it comes with Sun's messaging software. We're not going to use that; we use Exchange.
Q: How does this model fit into your overall purchasing strategy with other vendors?
We are moving more towards subscription-based software purchases. We're really getting away from per-processor pricing -- that's really important to us because we want to have a predictable cost structure.
Q: Is the per-employee pricing model something you've talked to other vendors about?
No, this was brand-new. We were one of the first customers to take Sun up on this. It came about because we were exploring options for buying some portal server software. It was proposed to us, and it was like a double-take for us. We calculated the numbers and said, "You're serious, right?" So it was definitely something new to us.
Q: What other vendors were pitching for your business?
We were considering IBM's WebSphere and BEA's WebLogic for their application and portal server solutions. But like I said, it was a no-brainer.