Sun may be emerging from cloud
Published: 09 Jun 2004 14:35 BST
Sun Microsystems' moves to sell data storage and services on a subscription basis may be considered defensive, gimmicky and late -- but that's doesn't mean they're bad ideas.
Sun last week announced it would provide data storage for $1.95 (£1.07) per gigabyte per month as well as data-centre services at a single price that's subject to a discount. After mulling over the plans for a few days, some analysts say that even if the struggling computer maker is mainly trying to drum up excitement, it still may be helping customers and itself.
"Sun didn't move in the direction of greatly expanding its use of subscription pricing models when the company was in robust, good health, at the top of the dot in dot-com boom," Jonathan Eunice, an analyst with researcher Illuminata, said, referring to Sun's ad slogan from the Internet mania days. "Many of its recent changes have been in the 'Hmmm... OK... Hmmm... So what do we do now?' category. That doesn't, however, mean they aren't smart moves."
Subscription pricing -- which Sun already had offered for software packages -- can help the company generate more predictable revenue, Eunice suggested. And offering to sell storage gear based on the number of megabytes used should appeal to customers, in part by allowing them to avoid up-front costs, said Brian Babineau, analyst at researcher Enterprise Storage Group. Already, storage rivals such as Hewlett-Packard and EMC have creative financing packages, he said.
"It's a little behind the competition, but it's a step in the right direction," he said.
Sun has been labouring to get its business going in the right direction. In the wake of the dot-com boom, Sun has weathered 12 straight quarters of declining revenue on a year-over-year basis. As part of its turnaround plans, Jonathan Schwartz was elevated from software chief to company president and chief operating officer. In his previous role, Schwartz introduced pricing plans by which a customer could use as much of Sun's server or desktop software as it wanted, paying according to how many employees it had.
Previous
Did you find this article useful?
177 out of 367 people found this useful
Digg
Slashdot
Del.ici.ous
Stumble
Reddit
