Sun Mimics Red Hat Model
Partners applauded Santa Clara, Calif.-based Sun's decision to give its middleware, N1 management and Java development tools away for freeand eventually as open sourceas a bold attempt to prevent more customers from defecting to other platforms and cull favor with developers and in the SMB world, where it has not played before.
The vendor took the same approach with Solaris 10 earlier this year.
Customers can run the software in-house without paying a license fee, but they must pay if they want support. Sun also launched Open Solaris this year.
"With its recent moves, Sun is dramatically expanding its developer community while courting customers concerned about a host of issues surrounding Microsoft," said Ron Herardian, president of Global System Services, a Sun partner in Mountain View, Calif.. "At the same time, Sun is opening up the software to developers who may today be moving to Linux or already developing on Linux."
The immediate availability at no cost of the Solaris Enterprise Systemwhich includes Solaris, N1, Java tools and all components of the Java Enterprise System including identity management, directory, messaging and SeeBeyond integration serverswill attract more developers and help partners sell to smaller firms, Sun said.
Detractors see it as another attempt by Sun to save its Unix software and hardware empire from annihilation at the hands of open-source competitors.
But some say the Solaris Enterprise System will give Microsoft and other ISVs reason for pause.
Sun's strategy not only mimics that of Linux market leader Red Hat and other open-source companies, it also signals, if somewhat symbolically, the beginning of the end of product margins in the proprietary software world. Partners say product margins don't matter anymore and that trend will continue as the software-as-services model takes hold. As Red Hat and Novell digest Solaris' share of the OS market and JBoss and Eclipse feast on the growing middleware and tools market, Sun must take dramatic steps to keep its business afloat.
"It's a good thing because margins have been minimal on those products anyway," said Dwight Hinkel, CEO of Applied Engineering, Bismarck, N.D., who makes his money on Sun consulting services and hardware sales. "These products may be free, but they're complicated and time-consuming. It'll also drive more hardware business. It would be a great idea if Sun would pre-install [Solaris Enterprise System] on every box they make."
Hinkel also buys the idea that the Solaris Enterprise System might interest a new class of SMB customers for Sun. "It makes the marketing here easier," he said. "You'll find some of the smaller companies that can't afford Windows take another look at Sun."
Sun's strategy is "a door opener," agreed Brian Upper, a Sun product area director at Sysix, a partner in Downers Grove, Ill. "We can tell them it is free, and we'll get in to talk to a customer. But at the end of the day, if they want support, they will have to buy the license and support. "
Last week, Sun Software President Jonathan Schwartz said the company will try to generate more revenue on managed services ranging from health and monitoring of systems, grid computing and other advanced services.
Bill Cate, director of Sun's U.S. partner programs, said it is difficult to predict how partners will be impacted by free software but maintains that most solution providers know that product margins won't generate their profits in the future. Instead, Sun is investing heavily in managed services and will authorize partners to sell those services and do joint delivery and subcontract through Sun's Consulting Organization. For instance, Sun is training and will go to market with partners on enterprise consolidation, information life-cycle management, identity management and business application delivery such as SAP and Siebel. Partners also can make more margins reselling Sun's product support by getting more training and offering first-level support to customers.
KRISTEN KENEDY contributed to this story.