Sun Services Introduces Utility Pricing For Outsourcing Through ACS

Sun Services, the professional services arm of Santa Clara, Calif.-based Sun, now is making its products available to outsourcing firm ACS on a pay-per-use basis, a model Dallas-based ACS is passing on to its customers, said Vivek Joshi, vice president of Sun Services strategy at Sun.

"What this allows them to do is access a broader range of IT infrastructure for a rate at which they need it," Joshi said.

Previously, ACS purchased equipment from Sun based on capacity the company thought it might need for customers, he said. Under the new utility pricing model, ACS now will purchase products and capacity from Sun for a monthly fee based on how ACS charges its customers based on a predetermined compute unit, Joshi said.

For instance, he said a customer could be charged per CPU or per gigabyte or terabyte, depending what ACS and the customer determine is the best model. ACS then will pay Sun a monthly fee for the units used by the customer, which also pays a monthly fee to ACS.

"We are providing ACS a predictable cost stream so together [ACS and the customer] can plan for demands for compute power [such as] peak loads, seasonal demands etc.," Joshi said. "We allow them now, through our flexible relationship, scale up and down at a predictable cost they didn't have before."

Sun also is guaranteeing ACS' customers get a "technology refresh" every four to five years, Joshi said. In addition, Sun will discount the price ACS customers pay per unit on a year-over-year basis, Joshi said.

For instance, if for one year ACS pays $1 per terabyte to Sun for outsourcing services for a customer, the next year ACS will pay 90 cents per terabyte and pass that discount on to the customer as well.

Sun's strategy differs from competitors IBM and Hewlett-Packard because Sun Services does no direct outsourcing, working only with partners for those deals, said Elizabeth King, director of solutions partners, global partner sales.

King said Sun also works within the parameters of deals customers already have set up with Sun outsourcing partners to ensure the pricing model for services is the right fit for them.

"We have looked to partners to execute how utility computing is going to be implemented," King said. "That's why teaming up with people like ACS is critical. We're helping ACS improve their model and improve customers' model."

Sun will be rolling out similar utility pricing deals with other outsourcing partners in the future, King said.