Sun's big idea for software: 'per-citizen' pricing

Sun Microsystems is working on a new way to sell its server and desktop software to governments, offering unlimited use for a fee based on how many citizens a country has, the company's top software executive said on Tuesday.

For example, a country participating in the programme could use Sun's software for its internal operations to enroll people in healthcare plans, to provide schools with computing infrastructure and to give citizens desktop computers, Jonathan Schwartz, executive vice president of Sun's software group, said in a meeting in San Francisco with reporters. The Santa Clara, California-based company plans to begin the programme by the end of June, he said.

The move is the latest attempt by Sun, a company that historically has made most of its money selling hardware, to shake up the software industry. Sun has tried for years with little success to make its software more competitive and widely used. But under Schwartz's leadership over the last 20 months, the software group has begun emphasising not just new technology but also new software marketing.

Sun will sell its Java Enterprise System server software and its Java Desktop System for personal computers using three pricing tiers based on the United Nations' definitions of countries as 'developed', 'developing' and 'least developed', Schwartz said.

"Across Asia and the world, there is an opportunity to grow the market by providing per-citizen pricing for network services as well as delivering per-citizen pricing for a full-up desktop," Schwartz said, freshly returned from a trip to China and other parts of Asia. "The governments that I spoke with last week are interested in investing in networking their economies and networking their populations," a move that's "reminiscent of what the US government did 100 years ago and 80 years ago with rural electrification and highway acts."

Though pricing hasn't been set, Schwartz gave an example of 40 cents per citizen and later said that level would be appropriate for the least-developed tier. Sun is working to address complications such as government-operated phone companies that later are transferred to the private sector.

RedMonk analyst Stephen O'Grady said now is a good time to try to get a foot in the door among government buyers, as illustrated by the success of Linux in places such as Munich, Germany, and Austin, Texas. "The Java Enterprise System doesn't equal Linux but it indicates a willingness to at least look at alternatives," he said.

Sun's software competes with packages from BEA Systems, IBM, Microsoft and the open source community, which produces a multitude of freely available packages. Sun has partially embraced open source software, for example by releasing an open source version of its StarOffice competitor to Microsoft Office.

Sun's per-citizen pricing likely will appeal to some countries "simply because it vastly simplifies their purchasing decisions" but the company will need to show that the advantages, such as support, make its software a better option than freely available open source alternatives, O'Grady said.

In another move to remake its software business, Schwartz said Sun will sell its Java Enterprise Software (JES) suite not only for Solaris and Linux but also for Windows and Hewlett-Packard's version of Unix, called HP-UX.

The new versions will be available by the end of the year and will include all of JES' modules - calendar, email, portal, instant messaging, web server and application server - said Stephen Borcich, executive director of Java systems and security marketing.

Coming sooner will be JES for Red Hat Enterprise Linux, which is due by 1 May, Borcich said.

Another example of Sun's novel approach to software is a deal by which companies with fewer than 100 employees may use JES for free, as long as they run it on Sun hardware. And Sun will give a free server with Advanced Micro Devices' Opteron processor to companies that sign up for a three-year deal to get a developer version of JES for $1,499 per year.

Stephen Shankland writes for CNET News.com.