By announcing last week it would begin providing indirect technical support for OpenOffice.org, Sun Microsystems Inc. took another quiet step towards admitting that the 'freemium' business model it has employed for the past five years has been -- at least in regards to sibling StarOffice -- a failure. Now the rise of Symphony, which pairs free software with the option of paid enterprise support plus the massive Notes userbase, bids fair to stick a fork in the project.
In August, Google Inc. began distributing StarOffice 8 free as part of its Google Pack download.
Sun's director of marketing for OpenOffice.org and StarOffice, Mark Herring, declined to say how many copies of StarOffice had been downloaded via Google Pack.
Nevertheless, it was just one more blow, albeit self-imposed, to Sun's efforts to sell the $70 StarOffice as a low-cost competitor to Microsoft Office.
The free OpenOffice.org has long been a favorite of the open-source community and anti-Microsoft sympathizers. But it has also recently been gaining some among governments and some enterprises looking for an alternative to Office.
Sun maintains de facto control of both OpenOffice.org and StarOffice. But it had been pushing StarOffice, with features such as enterprise support and indemnification against potential open-source lawsuits, at large customers.
Meanwhile, Microsoft Office continues to dominate the niche.
And in September, IBM said it was preparing an office suite called Symphony -- based around the same OpenOffice.org source code as StarOffice, but with more collaboration features.
None of this "seems to bode well for StarOffice," said Rob Koplowitz, an analyst with Forrester Research.
Origins of a Star
Sun acquired the German-based StarOffice in 1999 for $73.5 million. The price was so low that Sun's head of open-source, Simon Phipps, once quipped that buying StarOffice and deploying it to its then-42,000 employees was cheaper than paying for Microsoft Office licenses.
After establishing the semi-independent OpenOffice.org body and turning over the StarOffice source code to it, Sun announced plans to position StarOffice as a premium (albeit-low-cost) office suite targeting enterprises paying hefty fees to use Microsoft Office.
The move seemed to have plenty of promise. Single user licenses for StarOffice cost at most $75 -- volume licenses were cheaper -- and included limited support. That compared to the typical $300-plus list price for Microsoft Office. Sun similarly undercut Microsoft for formal technical support.
Gartner Inc. analyst Michael Silver predicted that there was a 50% chance that StarOffice would take one-tenth of the office software market away from Microsoft Office within 2 years.
Sun declined to say how many users it has for StarOffice today. "We just don't break that out," Herring said.
But a look at OpenOffice.org.'s Web site, which is maintained by Sun's StarOffice employees, shows that OpenOffice.org is much more popular than StarOffice.
Being free and having a higher public profile has helped OpenOffice.org win more than 110 million downloads, of which an estimated "tens of millions" are active users.
Sun had long been narrowing the technical gap between the two applications, so that OpenOffice.org wouldn't be viewed, as Herring put it, as a "dumbed-down version of StarOffice."
Besides support and indemnification, the only difference today between the two versions is that features arrive several months later in StarOffice, Herring said.
And users who get StarOffice free via Google Pack still get support and indemnification as if they had bought it.
Herring also admitted that despite recent saber-rattling from Microsoft, most small and medium enterprises (SMEs), which Sun now wants to target, "don't care about" about indemnification.
SMEs also prefer support from local resellers and system integrators rather than directly from Sun, Herring said, explaining Sun's move to begin providing back-line support to channel partners for $20 per user per year.
Setting their sights on MS Office
Sun's retreat from the enterprise arena will let IBM take a stab at Microsoft Office.
The beta of Symphony garnered 250,000 registered downloads in its first two months. By contrast, OpenOffice.org is being downloaded about 1 million times a week.
But when IBM formally launches Symphony next year, it will bring to the table something Sun can't with StarOffice nor with OpenOffice: a massive enterprise sales and support network (though the latter has traditionally not been cheap).
"IBM has 140 million knowledge workers using Lotus Notes that it can put Symphony in front of," Forrester's Koplowitz said. "Sun is just not in the best position to be an enterprise software player."
While Symphony will remain free, "it is true that we will offer fee-based support for Symphony on a worldwide basis for customers that ask for it," said Doug Heintzman, director of strategy for IBM collaboration, via e-mail this week. "We do believe that there will be some that do, but don't anticipate that being a great number. We are not looking to Symphony support as an explicitly profitable business model. The reason we put Symphony out in the market was not to create a market for our support and service business. We are putting Symphony in the market to effect change in the market."
Such change includes IBM's desire, since officially joining OpenOffice.org in September, to get Sun to loosen its hold on the group.
"IBM feels strongly that OpenOffice should move to an independent foundation," wrote Heintzmann.
OpenOffice.org held an executive advisory meeting about a month ago, according to Herring. He said no leadership positions had transferred from Sun to IBM employees yet, though he claimed Sun "would like to see that change."
"IBM is still a fairly recent member. They are still getting up to speed and seeing where they want to move forward," he said.
Heintzmann echoed those sentiments.
"IBM is a recent member of OpenOffice.org.org in the midst of a product beta and roll-out plan," he said. "As we start to donate more code and become increasingly active in the development of the next generation of OpenOffice.org.org technology, we anticipate taking on more community leadership roles."