SUN's desperate attempts

Strategy is a long term plan that gives an edge. Suicide is a fool's strategy to get an edge over death.

SUN Microsystems announced in a Press Release recently that most of its Middleware and Development tools are now 'free' to use. Not long ago, SUN made its flagship OS, solaris unix free and open source.

Though the press release boasts of the move as
"landmark moves in the battle to create the software platform of choice for the next-generation of the Internet"
the desperation however shows up without notice. As per the recent reports, SUN has been failing for a long time to have sustainable revenue. SUN has been reported loosing its servers market to Linux. It created Java, but never made any considerable revenue on it. And adding to the insult last month 84% of Sun stockholders voted for the repeal of Posion Pill, and thus making it clear that it is desperate to survive at least by a take over.

Now sun made it flagship Solaris Unix open source and free. It made its middleware and development tools open source free. That means no body will pay for the OS or the tools. Organizations 'pay' a little to get the needed support. And sun is betting its survival on these subscriptions to survive. This strategy of giving the product free and living on support services is a suicide. They are good for most of the copy cat open source products. Not for most others. Particularly for organizations who spent billions of dollars in Research and development. No organization made sustainable revenue on those subscriptions. Its not like Printer business. Giving a printer free and living on the cartridges. It makes a real business sense to do so in the case of printers. But not in the case of OS and middleware. The cost of a cartridge and frequency of probable such cartridge purchases definitely outweight the cost of printer in a very very short time. Wireless companies throw out free cell phones to get a pipeline to extract monthly bills from customers. WIth their 2year contracts, they generate a lot more revenue than the cost of the cellphones they are giving away. If you haven't noticed, prices of cell phone rate plans and printer catridges have been increasing at a very fast pace. But the subscription costs of software takes decades to match the license fees of OS and middleware.

They why SUN is doing this? I am afraid, they seem to have no other choice. But this is like committing a suicide to avoid the death. I hope there will be some miracle that can save Sun.


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