McNealy says Sun to announce Orion pricing next week

SAN FRANCISCO - Sun Microsystems Inc. will use its SunNetwork conference next week to reveal long-awaited details of a new pricing scheme it plans to introduce for its server software products, the company's chairman and chief executive officer (CEO) said Tuesday.

Sun said in February that it would package all of its key server software products together and ship them in synchronized quarterly releases under a project called Orion. The goal is to sell more software by making life easier for customers who have to deal with numerous different pricing schemes and release cycles.

Sun has stayed quiet about how it plans to price the software, but Chairman and CEO Scott McNealy implied Tuesday that customers who buy the Orion software stack could see significant savings. The products include its Sun ONE application server, portal server and directory server, as well as management tools for Solaris.

"We would never call it 'scorched earth' (pricing) because that might be illegal," McNealy joked, "but we're going to warm the earth about how we price that infrastructure software on top of our Sparc and x86 hardware." He made his comments in a speech at the OracleWorld show in San Francisco.

A Sun spokesman confirmed that the company will announce pricing for Orion next week, along with pricing for MadHatter, an initiative from Sun to sell desktop computers running Linux and a range of open-source software applications.

Sun is trying hard to boost its share of the software infrastructure market. BEA Systems Inc. and IBM Corp. dominate the market for application server software, but despite its relatively small market share, Sun's position has become more credible, said Ted Schadler, principal analyst with Forrester Research Inc. in Cambridge, Massachusetts.

"The functioning of (Sun ONE) is high. It's got a world-class directory server, and what it lacks in ease-of-use development tools it makes up for in security, the application server, the integration server, mobile enablement" and other areas, Schadler said in an interview last week.

In addition, Sun has started to compensate its sales team for selling Sun ONE, which could help the products get wider adoption, he said.

McNealy suggested that its Orion pricing will give it an edge over Dell Inc., which Sun appears increasingly to view as a competitor. Dell sells Intel Corp.-based servers running Linux and Windows, which have been widely seen as a threat to Sun's core Unix server business. Sun has responded by offering two Intel Corp.-based servers of its own running Linux and Solaris.

Customers who buy Sun's software on its own x86 servers will get a better deal than customers who buy its software from Dell, McNealy said.

"We're not gonna (provide the same pricing) on the Dell systems. We'll sell it on the Dell servers, it'll just be a little more expensive," he said. "So you have a choice between heaven and Dell."

Speaking with reporters after his keynote, McNealy rebuffed a question about whether Dell has become Sun's most serious competitor. "If they were (the most serious) it would be easy," he said.

After his on-stage jabs at Dell, McNealy softened his stance during the question-and-answer session, positioning the company as a good channel partner of Sun.