Sun tries new pricing model

Sun Microsystems Inc. of Santa Clara has a deal for countries in the developing world on its computer servers and software. According to a plan announced by Sun today in Shanghai, countries classified as developing by the United Nations can subscribe to a service that includes servers and software for a national government at a cost of 33 cents to $1.95 per citizen. "This may be the first time a company has based its pricing on a United Nations model," says chairman, president and CEO Scott McNealy. "Who says the United States doesn't support the U.N.?"

The announcement was one of many the server maker made at the Sun Network 2004 Conference, held in Shanghai. Although many of the changes were technical, including an expanded relationship with Fujitsu, one of the biggest developments may be a move from selling servers to selling services. Currently Sun gets only about 20 percent of its revenue as recurring. Sun would to make that 80 percent, Larry Singer, senior vice president of global market strategies, said in an interview. "This would make our revenue stream more predictable," he said. "It also makes our offerings to customers who don't want to tap into their capital budgets."

News source: Business Journal

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