Sun: N1 Will Yield New License TermsSun: N1 Will Yield New License Terms

Sun Microsystems isn't just changing the way it packages software; it's moving to a new licensing plan in which Sun will charge customers for use and availability instead of by CPU, directory entry, or number of mailboxes.

Jonathan Schwartz, executive VP of software, says Sun's "N1" initiative, which seeks to automate how the computing power of its servers gets parceled out to jobs in companies' data centers, will bring changes to Sun licenses as well as its product packaging. Schwartz wouldn't disclose details, but he says the changes could expose Sun's app server, directory server, portal-building software, and other products to more users; make its servers more attractive; and help keep CIOs from overbuying computing capacity.

Sun reported a net loss of $1.2 billion on sales of $12.5 billion for its 2002 fiscal year ended June 30.

"If the operating-system platform is running a spectrum of services, that makes the systems we deliver more competitive," Schwartz said Friday at a media conference in San Francisco. "We're done talking about individual product road maps. ... All the products we ship above the operating system will become part of the operating system."

James Governor, an analyst at research firm Illuminata, writes in a recent report that the IT market has become characterized by large systems vendors such as Sun selling integrated software stacks, leaving smaller independent software vendors with "crumbs." A key factor in IT markets is "what intellectual property can be given away to achieve market position," he writes.

But Schwartz says Sun will only give away basic versions of its software. Sun's Solaris 9 operating system includes a bundled app server that runs on a single CPU and a directory server that has room for 200,000 entries. Scale beyond those limits--as most large companies do--and Sun charges licensing fees. Those fees are pegged to different criteria today, such as the number of CPUs deployed or the number of E-mail mailboxes set up. Sun wants to unify its licensing terms to reflect computing "capacity" used and levels of software availability.

Schwartz says Sun is also moving toward releasing quarterly updates of Solaris and its middleware stack to better predict when IT shops will adopt upgrades.