Feeds

Sun subscriptions become model for growth

More predictable revenue flow

  • alert
  • submit to reddit

Internet Security Threat Report 2014

Following the current trend among IT providers, Sun is hoping to develop a more predictable revenue flow. The company is adopting subscription-based pricing for Grid computing, along with Solaris, to grow the percentage of income it derives from recurring revenue.

Systems company Sun is changing its pricing model and extending subscriptions to all software so two thirds of income comes from recurring revenue, up from one third today.

Company senior vice president Jonathan Schwartz told analysts yesterday Grid would be next to adopt subscriptions, although details of pricing have yet to be finalized.

He did not go into further details. Solaris has been made available on a subscription basis through Sun's recently launched Java Enterprise System (JES) and the Enterprise Developer Promotion for Sun's Developer Network, launched Tuesday.

Complementing the drive towards subscriptions, Sun will also attempt to reduce its operating expenses. The company is examining which back-office operations to outsource, continuing the trend established by outsourcing payroll. Other steps include a reduction in Sun's real estate bill with further site closures and a consolidation of the worldwide labs into a single organization.

The changes follow a difficult financial period for Sun. Once a high flyer, Sun has recorded successive quarterly and annual losses, culminating recently with sales dropping 8.5% for fiscal 2003 to $11.4 billion and a $2.4 billion loss, following restructurings and write-offs.

Company chief financial officer Steve McGowan told analysts savings on operations is one of his priorities going forward. The other priority is revenue growth. "I didn't have that as a priority last year," Mr McGowan said.

Subscriptions are an important part of Sun's plans to grow revenue, providing annuity-based income and the ability to project cash flow. Like many IT suppliers, Sun is attempting to establish a more predictable and repeatable source of income.

Unlike most, though, Sun's actions are partly motivated by an attempt to put an end to losses by monetizing the company's skills in software, particularly Java, whilst growing market share in various sectors.

Source: ComputerWire/Datamonitor

Beginner's guide to SSL certificates

More from The Register

next story
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
Turnbull should spare us all airline-magazine-grade cloud hype
Box-hugger is not a dirty word, Minister. Box-huggers make the cloud WORK
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
Microsoft adds video offering to Office 365. Oh NOES, you'll need Adobe Flash
Lovely presentations... but not on your Flash-hating mobe
prev story

Whitepapers

Go beyond APM with real-time IT operations analytics
How IT operations teams can harness the wealth of wire data already flowing through their environment for real-time operational intelligence.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.