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.
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.
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.
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.
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.)
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.
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.