Sun's StarOffice Launches Renewed Attack on MS Office

In a campaign to compete directly with Microsoft (Nasdaq: MSFT) Office, Sun Microsystems (Nasdaq: JAVA) released its new StarOffice suite of applications Wednesday, touting the package as an alternative to proprietary software and noting that StarOffice has fewer licensing restrictions.

With enterprise pricing as low as US$25, StarOffice 6.0 can run on Linux, Solaris and Windows platforms and will retail for $79.95 -- compared with $479 for Microsoft Office or $239 for an MS Office upgrade.

Earlier this year, Sun promised to release a more robust application with better customer support than version 5.2, which the company has offered since it acquired the StarOffice product line in 1999.

Using open and published XML (extensible markup language), documents created in StarOffice can be opened, modified and shared with other programs, such as Office XP.

StarOffice is created from the same software as OpenOffice, an open source project developed by Sun and others in which code is changed and shared among programmers.

The new suite will be made available to the retail market on May 21st.

Sun Cites Demand

Mike Rogers, vice president and general manager of desktop and office productivity software at Sun Microsystems, said earlier versions of StarOffice registered more than 8 million downloads, indicating that customers are demanding an alternative to Microsoft Office.

"Our enterprise customers worldwide are asking for freedom of choice, and we're giving it to them with StarOffice 6.0 -- freedom from restrictive licensing and freedom from unreasonable pricing and forced upgrades," Rogers said.

According to Sun, more than 1.8 million users in the enterprise, government and education sectors currently are evaluating the software. The company estimated an aggregate savings of $200 million in licensing costs for those users if they choose to replace Office with StarOffice.

Educational institutions pay only for the cost of the CD and shipping, Sun added.

Sun also noted that such original equipment manufacturers (OEMs) as Hyundai, MandrakeSoft, SuSE Linux, Turbolinux and Ximian are planning to include StarOffice 6.0 in their product offerings.

Competing with Redmond

Microsoft countered the announcement with its own explanation of Sun's new release. A company spokesperson told news sources that the value of Microsoft's Office suite far exceeds its market price, and dubbed StarOffice a "cheap alternative" to Microsoft's Office products.

Rob Perry, senior analyst at the Yankee Group, told the E-Commerce Times that it is unlikely Microsoft is "losing any sleep" over Sun's StarOffice launch.

"The desktop productivity market [race] is over. Microsoft owns it, unless the platform changes to something else and Windows goes away," Perry said.

Price Point Effect Unclear

Despite StarOffice's low price, Perry said he does not believe that companies currently using Office will switch to Sun's offering.

"The price of the application is not that important compared to the cost of retraining people," Perry said. "If you have to relearn these applications, it costs you much more than $400 in productivity loss.

"That's the real thing that holds Office in the enterprise," he added.

Home User Dabblers

But Perry noted that he does see a market for StarOffice among high-end home users, many of whom he predicted will experiment with using Linux, if they have not already done so.

"They're not paying $400 for Office anyway -- they're getting upgrades from their neighbors. There is still lots of sharing in the home market," Perry said.

Perry added that with its new, more restrictive licensing and registration policies, Microsoft is trying its best to put an end to sharing. Its efforts so far, however, have had little effect beyond simply raising consumers' ire.