Significance of Sun’s StarOffice pricing

By : |May 30, 2002 0



Stacey Quandt

The time is ripe for Sun’s StarOffice to take market share from Microsoft
with organizations upgrading older office suites, such as Microsoft Office
97. While many end users are expected to stay the course with Microsoft,
considering the widespread deployment of Office 97 and 2000 during the past
several years that built Microsoft’s market share to more than 90 per cent,
some users are evaluating alternatives. Despite the desire for a uniform office
productivity application suite, which has led to the near ubiquity of Microsoft
Office on the desktop, the biggest obstacle to Microsoft’s continued dominance
is its new licensing program. Input from Giga clients in the context of
GigaWorld IT Forum and inquiries indicates that Microsoft licensing programs are
spurring IT managers to explore other office productivity options such as
StarOffice 6.0, the latest version of the Office productivity product.

Giga expects Sun to achieve some success in selling StarOffice 6.0 as an
alternative to Microsoft Office due to competitive pricing ($25 to $50 for
enterprise customers) and a number of technical improvements, such as the
elimination of an integrated desktop, the use of Extensible Markup Language (XML)
as the default file format and enhanced support for Microsoft file formats. What
makes StarOffice pricing different and distinct from Microsoft is that it is
based on users, not per device. Users may deploy each copy StarOffice on five
different systems. This enables greater flexibility than Microsoft Office, which
is more restrictive. The retail offering has a US manufacturer’s suggested
retail price (MSRP) of $75.95. Education customers pay only for the cost of the
media (CD-ROM) and shipping. Sun continues to support the availability of a free
version of OpenOffice, which is an open source version of StarOffice, through a
no charge download at www.openoffice.org.

Sun claims that more than 1.8 million users at Fortune 500 companies, from
industries such as financial services, retail, manufacturing, government and
education markets, are evaluating and deploying the StarOffice 6.0 software,
with an aggregate savings of more than $200 million in licensing costs. This
mirrors similar market segments where Giga clients are evaluating StarOffice and
other office productivity solutions as an alternative to Microsoft Office, but
so far only a small number of Giga clients have communicated an intention to
migrate to StarOffice. Still, the threat of migration away from Microsoft Office
gives end users leverage in respective licensing negotiations with Microsoft. We
expect this trend to benefit users with significant pricing advantages for those
who stay the course with Microsoft. In time, if Microsoft begins to lose
significant market share to StarOffice, it is reasonable to assume that
Microsoft will become more aggressive with Office licensing alternatives.

For organizations considering an alternative to Microsoft Office, the most
significant caveat is that StarOffice does not provide seamless macro and
scripting language support. In fact, for users who need to support pivot tables
or macros written in Visual Basic, StarOffice is not a recommended solution.
However, for users who do not need support for more advanced features found only
in Microsoft Office, StarOffice may well be an acceptable alternative. Overall,
Giga suggests co-existence with Microsoft Office environments rather than a
complete replacement.

For Giga clients interested in evaluating StarOffice 6.0, the least
disruptive scenario would be to initially put StarOffice on new deployments of
desktops while keeping MS Office on existing desktops. If the deployments go
well, clients can consider phasing out Microsoft Office on more Windows desktops
at the next upgrade cycle. In organizations where Microsoft Office is not widely
used or where Linux and or Solaris desktops and workstations are used, it will
be possible to be more aggressive in deploying StarOffice. In general,
organizations that have yet to begin a migration, but want to stay the course
with Microsoft technology, will be best served by migrating to Microsoft Office
XP under a new select or enterprise agreement as their situation dictates.

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