...pay $140 per year, per employee, for the entire Java Enterprise Server collection. For example, a company with 1,000 employees would pay $50,000 to use as much of the identity management software as desired, and another $50,000 to add the suite for email, online calendars and contact lists.
"Today customers have the opportunity to use the software free of charge. For that, they will get pointed back to community and forums for support. There's no indemnification, warranty, service and support, break and fix [support]," said John Loiacono, Sun's executive vice-president for software. "That's very unacceptable for the vast majority of any customers doing any kind of business-critical deployment."
Pricing isn't the only issue the company faces with its software. With some exceptions such as its identity management package, Sun's server software hasn't been terribly popular despite a lower cost than rival products from IBM and BEA. One core product, the application server that runs Java programs, was already made available for free, and customers with fewer than 100 employees could use the Java Enterprise System for free.
Schwartz said Sun's free application server has become widely used, but acknowledged that the company has had a challenge finding "the right mechanism to monetise the volume out there."
But he also said Sun has achieved some success with the JES pricing. "It has become roughly a $100m-a-year business for Sun," he said.
In the last few quarters, Loiacono said, the software subscription model has been increasing deferred revenue, which is money customers are scheduled to pay Sun in the future.
And Sun is hoping the new strategy will carry it into a customer segment it has largely missed so far: small and medium-size businesses known in the industry as SMBs.
Although Sun has offered JES free to small companies since 2003, it hasn't matched the offer with marketing, Loiacono said. Now, in combination with sales channel partners, Sun plans to try to tackle that market with particular subsets of JES.
"Not a lot of SMBs are going to want high-end clustering, but almost every one will be looking at the Web tier," Loiacono said.
Release schedules
About 80 percent of the packages are available for free download today. In December, Sun plans to make PostgreSQL available, Loiacono said. In the first quarter of 2006 will come identity management, Sun Ray and Tarentella software. The SeeBeyond software is due to be released for free near the end of the first quarter.
Sun was less forthcoming on the schedule for when the software would become open source as well, but Loiacono said significant elements will arrive in the first quarter of 2006 and that most current products should be open source within two years.
"From what we have today, we would assume that within couple years we'll have the majority attacked," Loiacono said, cautioning that any new software acquisitions won't necessarily happen on the same schedule.
Sun can't release software until legal reviews have been completed, but Loiacono said a more significant delay is caused by the time it takes to build a developer community that's interested — either by adopting an existing community or building a new one from scratch.
Sun plans to use its Community Development and Distribution License to cover the server software, Loiacono added, but reserved the option to use a different open source licence if faced with issues the company isn't aware of today.
