STAROFFICE AT A PRICE

Sun Microsystems has stepped away from its traditional stance...

For long, Sun Microsystems has displayed the "free" status of
StarOffice as its commitment to freeware. But now with the pricing of StarOffice
6.0, the company has stepped away from its traditional stance and stepped into
Microsoft’s turf. The question is: How much inroad will StarOffice 6.0 make
into the office suite market dominated by Microsoft?

Distributors and established channel partners are eyeing this business
opportunity for revenue growth. But factors like maintaining a dedicated service
network, recurring overheads and technology obsolescence are coming on the way.
Partners want to provide quality service. But working out a workable revenue
model that is acceptable to end-users has become difficult.

How much StarOffice at a price will sell...

Partners are uncertain as to how many copies of StarOffice would sell at a
price and whether these sales would make any dent in the sales of Microsoft’s
Office suite. Microsoft today clearly holds a market share of about 85 percent.
There is no doubt that the end-user market is opening up for products other than
that of Microsoft. Also, the low cost of StarOffice stands to its advantage. But
whether this will persuade users to migrate from MS Office to StarOffice is
difficult to answer.

Lack of product knowledge...

The lack of product knowledge about StarOffice among users is its biggest
disadvantage. The acceptability of StarOffice is bound to change but not much
unless Sun spends marketing bucks to promote the product. The key accelerator
for acceptance of any office suite is not just the price but also its features.
The awareness of the full features of StarOffice is very low among users who
also have issues related to compatibility of the product on other platforms and
environments. As a result, the adoption levels are still low despite its
pricing. On the other hand, as the pressure from Nasscom on pirated software
increases, organizations will more seriously consider going in for StarOffice.
Although StarOffice has certain factors favoring it, issues like lack of
awareness of the features and the brand pull of Microsoft tend to push users to
consider Office suite as compared to StarOffice 6.0.

Commitment to service...

All said and done, by the end of the day, the earning for a channel partner
depends on the sale minus the service cost. Though Sun claims commitment to
offer support on StarOffice, the question is: Is Sun Microsystems in a position
to address all service-related queries across geographies?

Sun is committed to provide quality support...

In the past many potential enterprise customers approached us with issues
around StarOffice not being a priority to Sun due to the free offering. Our
decision to price the software is a commitment from our side to stand behind the
product. It also shows that we are really serious about the kind of support,
training and special service options that people expect. If one has to deliver
these services to a mass customer base, it is not possible to deliver them free
of cost. And also, giving away a product free brings down the perceived value of
the product.

We are optimistic about the pricing strategy...

Apart from confirming our commitment to offer quality support to StarOffice
suites, our pricing strategy will now help channel partners earn revenues.

We at Sun are optimistic about the prospects of achieving a target of
2,00,000 installations of StarOffice within a next year. We have pushed about
30,000 CDs of StarOffice 5.2 into the market and have also installed bases in
large enterprises like IDBI and JK group. In the last one and a half months,
after the launch of StarOffice 6.0 we have installed about 400 seats. We are
talking to the Government of Karnataka for the use of StarOffice across 300
schools in the state.

Educating end-users with workshops...

Apart from organizing regular workshops and other promotional activities at
equal intervals, we are also working closely with government organizations,
educational institutions and Linux users to increase the acceptance levels.

We also have Sun’s authorized channel network consisting of master
distributor with coverage across India, regular channel partners and resellers
who are helping us extensively in this mission. Despite the fact that Microsoft
has an edge over others due to the brand pull, we have an upper hand in terms of
offering cost saving options and disgruntlement over Microsoft’s Assurance
programs.

Microsoft’s Assurance Licensing program favors StarOffice...

Another advantage that is in favor of StarOffice is the general perception
among users and enterprises that Microsoft’s Assurance Licensing program is
expensive. End-users around the world have voiced their concerns about the
Microsoft’s expensive licencing policy and this could force them to explore
cheaper alternatives like StarOffice 6.0.

Service investments...

We have made substantial investments into setting up training and support
centers across the country. At the same time we remain committed to be the best
value alternative in the market with savings of 80-90 percent in the license fee
compared to our competitors. For those who still do not want to pay they can
download from OpenOffice.