Sun's StarPortal Opens Its Gates Early

  • Written By: R. Krause
  • Published: January 10 2000

Event Summary

December 22, 1999 (PC Week Online) - Sun Microsystems Inc. has launched an "early access" program for its StarPortal desktop productivity suite. Officials said the company has frozen the StarPortal software code and chosen partners to test features and functionality. Sun then will open up the program to more partners to test beta versions and deploy pilots.

Along with selected application service providers, Internet service providers, and enterprise customers, US West Inc. and Bell Atlantic Corp. have already registered with Sun to host StarPortal.

Market Impact

This marks the first ASP-based office suite, ostensibly beating Microsoft to the punch by as much as twelve months. (StarPortal availability is expected in the first half of 2000, "Microsoft Office Online" is not expected for 12-18 months). In the battle for mindshare, a year is almost forever. Although we do not believe the ASP-based office suites will gain nearly as much acceptance as Sun and Microsoft would like us to believe, ownership of this segment can be important. Growth in the ASP-computing market should increase, as is normally the case when a "new" product is given away for minimal cost.

With this announcement, consolidation in the office suite market becomes less likely. Microsoft presently owns approximately 80% of this segment; Star Portal/StartOffice would have to cannibalize the other office productivity suites instead of MS Office for consolidation to increase. Although we expect StarPortal will take market share from some of the less popular suites, we also expect MS will lose share. Given the ever-present battle between Sun (and its CEO, Scott McNealy) and Microsoft, taking share from MS is certainly part of Sun's strategy.

User Recommendations

In general, healthy competition is good for users, and this is no exception. Although StarOffice is not as feature-rich as MS Office, it is a lot less expensive. This low cost will appeal to the same users who will gravitate to ASP-based computing in the first place - the ones trying to reduce computing costs. If Sun grabs enough market share (>25%), it may induce Microsoft to lower their pricing. (Microsoft has not yet announced pricing for their product, but we expect it would be similar to current products. Presently the Office 2000 upgrade version is $225 to $350, the full version can run $500 or $600.)

This announcement should have no direct impact on those users who shun the ASP-based computing model. However, if Sun prices StarPortal low enough (a/k/a free or dirt cheap), financial people may consider changing to ASP computing. Caveat: As with all major changes, management should look at all costs, not just price - often end-user resistance to a "paradigm shift" is the biggest obstacle.

Users who are currently in the purchasing cycle for application/productivity suites should not alter their plans, since it will be six months before StarPortal has enough "miles" on it to assess its corporate viability. Users who are planning a late-2000 purchase, and who are willing to consider ASP-based computing should consider this strongly.

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