Sun buys Star Division to enter Microsoft’s Office suite

Sun Microsystems has taken a shot at the heart of one of Microsoft’s
most profitable product lines as the Mountain View computer maker
announced it has acquired Star Division of Fremont. Sun said it will
immediately make the StarOffice suite of business applications available
for free download from the Internet.

The Star Office suite includes word processing, spreadsheet, and
presentation graphics and several other applications. Microsoft’s Office
suite starts at around $400 - and comes in a box of CDs. Unlike Microsoft
Office, StarOffice can run on both Windows, Linux, OS/2 and Sun Solaris
computer operating system platforms.

Analysts said Sun’s move serves multiple purposes. For one, for the
Unix and Linux platforms to continue to build on the new momentum is has
gained from their popularity in supporting e-commerce sites, more
Windows-like business applications need to become available.

The availability of such applications, such as the StarOffice suite
will help attracts both new customers for Sun and also helps prevent
defections to the Windows NT/2000 platform. And, many feel, there is
nothing Sun chief Scott McNealy likes to do better than eroding Microsoft’s
dominance in the business application software market.

On the surface, however, Sun executives insisted that the Star Division
purchase and making StarOffice available for free, are not part of a
campaign to target Microsoft. "We are going after the future, not
Microsoft. There is a massive trend towards Internet applications, and the
next logical step was to bring the office environment to this
domain," said Brian Croll, a senior marketing director at Sun. Added
McNealy, "You might describe this announcement as one small step for
office software, one giant leap for the Web."

While it may prove important in the long terms, the availability of a free office software suite is unlikely to have the same affect on Microsoft Office sales as the free Microsoft Internet Explorer had on sales of Netscape’s Navigator browser. Few Office customers are likely to switch to a suite that is clearly inferior to the Microsoft Office suite. "I don’t think Sun will make an impact. Nearly 80% of business software is purchased by corporations. And they will stick with Office because they are heavily invested in it and it works," said analyst Laura Lederman.

Star Division was founded in Germany in 1985 by Marco Boerries. He later moved the company’s headquarters to Fremont in Silicon Valley. All 155 Star Division employees will be offered jobs with Sun. Boerries will become Sun’s new vice president of Web-based Applications.

StarOffice will become downloadable this fall from a new Sun Website called StarPortal. Until then, the software can be downloaded from www.sun.com/staroffice.