Middleware is being remodeled to meet the needs of today’s marketplace. Rather than offering point solutions that require the customer to integrate individual products, a bundled package of capabilities now allows organizations to purchase a software system and deploy it immediately. In addition, the system is offered under a unique pricing plan—$100 per employee per year—that includes support, maintenance and upgrades, enabling information technology managers to better plan their software budget.
The new approach is being introduced by Sun Microsystems Incorporated (
www.sun.com) with its Java Enterprise System (JES), which combines software and services in a single product offering. Although JES is designed as an integrated solution, it is modular, so customers can choose the specific capabilities that meet their requirements.
Andrew Taylor, group marketing manager, JES, Sun Microsystems, uses an assembly-required car analogy to describe the differences between the traditional and new methodologies. In the traditional approach, software companies provide the pieces of a car, then the customer decides what pieces to include and puts it together. “With JES, we’re saying, ‘Here’s the car.’ We’ve already assembled all the kit’s pieces in one functional car that you can drive off immediately. But if you want to change the seats or you want to change the wheels, it’s based on open systems and you can do that,” Taylor says. This approach saves time and resources and eliminates human error and risk in information technology projects, he adds.
JES is infrastructure software. Unlike middleware, which refers primarily to individual products that a customer must integrate, it provides the network services that an organization needs to deploy business applications. These include network identity, Web and applications, communications and collaboration, portal, availability and security.
Taylor notes that although JES offers a complete infrastructure software system as a single entity, this does not mean that organizations would have to rip out and replace their old systems. Although that is one possible approach, customers typically have been adding JES or replacing current pieces of their systems. “So you can take everything or you can take one component, and it’s based on how people cooperate and cohabitate with existing environments. What we’re finding is that companies are taking one, two, three, four products from Java Enterprise Systems, putting them into their environment for a specific project, and then they plan to migrate more of their stuff gradually across JES because it’s cost-effective from an acquisition perspective and they’ve already bought all this functionality,” Taylor explains. JES interoperates with capabilities such as messaging, e-mail, calendar and Web browsers through standard protocol interfaces.
In addition to streamlining the integration of infrastructure services, Sun also has simplified the purchasing model with its JES purchasing plan. “The business model has resonated with a lot of senior executives within organizations because we’ve simplified the whole acquisition for buying infrastructure software. For example, if a company wants to build a portal, it would go to industry and say, ‘We want a portal with messaging, calendar, instant messaging and directory services, and obviously we want to authenticate access.’ Industry would come back and say, ‘We price portals by the number of CPUs. How many CPUs do you want? We price messaging by the number of mailboxes. How many mailboxes do you need? We price calendar by users and directory by entries.’ Before you can build or decide what you want, you have to go through this long business justification and understand what it’s going to cost to build this service. And then you’ve got to integrate it before you can deploy it and put your own applications on top. So there is a big cost,” Taylor explains.
To simplify this process, Sun chose to sell JES based on a single unit of measure: the number of employees in an organization. JES, which features 13 component products, costs $100 per employee per year. In addition, part of the rights and conditions of the business model includes an infinite right to use. “That means that if you buy into the model of $100 per employee per year, you can use the software as much as you want, for as many employees as you want. You can use it to trade with your partners and customers—like a service provider offering services to its customers—at no additional charge,” Taylor relates.
For instance, if a company has 5,000 employees and millions of subscribers, it would pay $100 x 5,000 each year for JES. In the traditional model, the firm also would have to pay a designated amount per subscriber, but in the Sun arrangement, this is included. “The infinite right to use based on the number of employees in the company can be a significant savings to companies, and it’s very straight forward,” he states. Sun can verify the number of employees in a firm because it is an audited number that is publicly available in most cases, he adds.
This annual price per employee includes not only the software system but also upgrades, support and maintenance. Depending on the number of employees licensed, the price also includes consulting services, education services and training for a designated number of hours per year.
The company has capped the price increase for JES at 5 percent annually, and each year the customer can adjust the number of licenses based on the current number of employees. Taylor emphasizes that this allows firms to estimate their information technology budget with more certainty.
According to Taylor, Sun Microsystems is the only company currently offering this type of arrangement, but other companies, including Oracle, are beginning to explore using the same pricing method. Customers are beginning to demand this type of model, he adds, because they are spending approximately 80 percent of their annual information technology budget for maintenance and the remainder for new purchases. Most businesses strive to balance maintenance and acquisition investments equally, and Taylor believes the new pricing plan facilitates this effort.
From Sun Microsystems’ perspective, this sales method will increase the company’s penetration within its own accounts and build a trusted relationship between the company and its customers, Taylor says.
