Sun Drops Price of Key Software To Zero

Officially, Sun is reducing to zero the base-level cost of its Java Enterprise System, its Sun N1 Management software and Sun developer tools. Additionally, Sun said it will bundle all of these components along with the Solaris OS into a single product offering called the Solaris Enterprise System.

The company is doing so in recognition of what Sun president and COO Jonathan Schwartz says is the simple fact the product features and technical quality alone do not guarantee success in the marketplace. What does spell success more often than not is a large installed base created by very low barriers, including price-to-entry, to adopt a technology and/or service.

“The most important attribute of any product in the marketplace right now is volume,” Schwartz said at a press conference held Wednesday. “Volume wins in marketplace, especially in marketplace for technology. Volume implies you generate the broadest ecosystem, the broadest market opportunity, the broadest market potential and certainly this is useful in lowering costs and opening markets.”

Sun&'s move follows a previous effort to increase share for its Solaris OS, including dropping the price of the operating systems software to zero and embracing an open-source business model. When it did so, use of the software increased, according to Sun, as it has for other Sun efforts that have low barriers to entry, such as the Java Enterprise System or the Star Office productivity suite.

Schwartz went on to explain that Sun needs to increase awareness and adoption of its products in two key camps: the developer community and the corporate sector. The former, he explained, gains access to Sun technology by joining communities, while the latter buys or adopts software when it buys solutions or products. Regardless, serious users generally buy support and service contracts whenever embracing software, he noted. To wit, Sun has no single corporate user that relies on the free version of its software, Schwartz said.

Contrary to what some fear, Sun&'s revenue stream is not likely to dry up by making this bold move, Sun officials claim. Just as cellphone companies give away free handsets, or Google offers free e-mail and search services, so, too, will Sun be able to offer compelling services and offerings that customers will be willing to pay for, the company said. What is not yet clear is whether downstream partners who count on the sale of Sun products will feel any economic impact from such a move.