NZ Sun customers sticking with troubled vendor

Users of Sun Microsystems products appear to be standing by the troubled vendor, and are showing interest in a new licensing model it has unveiled.

Users of Sun Microsystems products appear to be standing by the troubled vendor, and are showing interest in a new licensing model it has unveiled.

The company recently amended its fourth quarter 2002-03 financial year results from a $US12 million profit to a $US1.04 billion loss. Sun said the amended figures were the result of an increase in a valuation allowance for the company's net deferred tax assets. The company also laid off 1000 staff in June in a new round of redundancies.

Alistair James, CIO at The Correspondence School, says Sun's new licensing model, Sun Java Enterprise System, could be of benefit, but is waiting to see what the educational offering entails.

James says the school, a user of Sun servers and Java tools, is looking forward to the new model optimistically, but has only seen details of the corporate version of the scheme. "It looks to have potential for us to make more of Sun's products at a lower cost and to reduce some of the complexity around licensing and maintenance."

Under the corporate version, unveiled last month, customers will be able to use a bundle of Sun products, including operating system, directory, application and portal servers, for $US100 per user a year, as opposed to the prevalent per-processor model.

"As a non-profit organisation, licensing and maintenance are quite expensive for us, but we do get some good benefits from Sun's educational discounts," James says.

Portal services is one of the features of the package The Correspondence School, being a distance learning organisation, is particularly interested in, he says. "We have 20,000 students and while not all are online, it's a growing area."

The school runs Sun servers "and we're building a sizeable application, a learning management system, in Java on the J2EE platform."

Despite Sun's financial difficulties in the US, James sees "a future" for the school with Sun.

Telecom chief technology officer Murray Milner hasn't looked in detail at Sun Java Enterprise, but says it sounds interesting.

Telecom uses Sun servers and Milner says of Sun's financial woes that when a vendor experiences such difficulties, "you're always worried about it and have to manage the risk appropriately".

Some observers say Sun is in major difficulties, notably Wall Street analyst Steven Milunovich, who wrote an open letter to Sun CEO Scott McNealy urging him to further cut expenses and narrow Sun's product range.

Others say that despite the difficulties the vendor is far from finished and point to new initiatives such as Java Enterprise and the Java Desktop System, a similar bundle for the desktop, as well as N1, a systems management offering broadly based on grid computing principles.

Most agree Sun has to become less dependent on its server business and increase revenue from the new initiatives.

HP recently introduced an incentive scheme for Sun users to migrate from Sun's Solaris Unix operating system to HP's Linux-based products, but Sun has dismissed the offering as merely a response to Sun's HP Away programme, launched earlier this year, to lure HP customers away from the Tru64 base HP acquired when it bought Compaq.

HP New Zealand spokesman Ken Erskine says there are no plans to offer the scheme here.

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