Sun Puts a Price on Orion

Call it inspiration or call it desperation, but from a pure pricing perspective, when it comes to Sun’s newly announced pricing for its Orion middleware stack, the question is—what’s not to like?

Sun has just announced a flat-rate per user pricing strategy for the bundle of software, which looks to be one of the simplest models for enterprise software the industry has seen for a long time. The price could fall as low as $100 per employee, all for a bundle that includes portal, application, identity, and integration servers. Sun, however, is quick to draw the distinction between Orion and other software bundles. It argues – justifiably so, in mp opinion – that the Orion package goes far beyond a mere bundle, in that these formerly separate products are now developed, tested and delivered according to a single release calendar, rather than merely shrink wrapped together and handed off to a customer. But perhaps the most important wrinkle of all is that Sun has decided not to distinguish between apps used inside or outside the firewall. Firms will not be penalized for their success in offering services to customers over the Web.

“Sun will be offering one price, one bundle and a two-page license,” said Jonathan Schwartz, executive vice president for Sun Software.

This simplicity narrative should resonate with customer organizations—which have been complaining bitterly about the complexity of current software pricing models. Enterprises have grown increasingly frustrated by the constant pricing maneuvering of vendors. Per processor pricing, for example, leaves users exposed to the vagaries of system builders approach to scalability. Thus Oracle on a large IBM AIX configuration is likely to be very different from a similarly speced HP-UX box. But software licensing should not be rocket science.

The Orion pricing offer will only be available to customers buying Sun Orion middleware on Sun hardware. But that’s ok. This kind of offer might have seemed absurd in the hard-charging “open systems” led Net boom, but the reintegration of systems stacks is in full swing, and Sun is gleefully leading the charge. BEA continues to bundle ever more functionality into its WebLogic platform while IBM’s announcement of a standard high volume building block comprised of WebSphere, Power4 based hardware, and a Linux distro is yet another indication of the trend.

Of course the new pricing model won’t mean that suddenly BEA and IBM shops start kicking their suppliers out wholesale. The app server decision is too strategic to be a simple handoff to the lowest cost provider. But for some customers and some applications, especially shops that are major Sun ONE Directory Server customers, the attractions of a fully integrated stack at a fraction of the cost of competitive offerings will be hard to resist, especially given the on-demand pricing model. More users equals more money; that’s not so hard.

Orion is very much a work in progress but it’s nice to see some innovation around pricing in the industry. Responding to enterprise concerns won’t do Sun any harm. Maybe it isn’t the “high cost” provider after all…