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Analyst: Sun sets Orion software price

Sun Microsystems likely will charge corporations $100 to $200 per employee for use of its Orion software collection, a price that could pressure Microsoft, an analyst says.

Sun Microsystems likely will charge corporations $100 to $200 per employee for use of its Orion software collection, a price that could pressure Microsoft on some products, according to a prominent Wall Street analyst.

Jonathan Schwartz, Sun's executive vice president for software, disclosed in March that Sun plans to charge for the entire collection of Orion software based on how many employees a company has. On Wednesday, Merrill Lynch analyst Steve Milunovich disclosed a price range in a report after meeting with Schwartz.

"Sun is considering an annual subscription fee of $100 to $200 per employee," Milunovich said.

He said the strategy could help Sun, a Santa Clara, Calif.-based seller of servers that's struggling to fend off competition from IBM, Microsoft and Dell Computer while grappling with a lackluster economic climate.

"Orion is arguably less expensive and more robust than Microsoft's stack," Milunovich said in reference to the software giant's collection of software. "Additional revenue could be in the hundreds of millions."

In its most recent quarter, Sun had about $2.8 billion in revenue, a drop from the $3.1 billion from the same quarter a year before.

Sun declined to comment on Orion pricing.

Orion has numerous components drawn from the Sun Open Network Environment server software collection. Orion includes a Web server to house Web sites, an application server to run server programs, a portal server to run customized Web sites for specific groups of computer users, a directory server to record username-password pairs, and packages for handling e-mail, calendars and contact lists. It rests on an operating system foundation of Linux or Solaris.

Sun argues that Orion will be simpler to pay for as well as less expensive. Today, those packages each have separate price tags based on measurements ranging from the number of e-mail boxes to the number of processors on a computer. Sun also argues that Orion, which will be updated quarterly, will be a more predictable base for other software.

Orion competes with larger software collections from IBM and Microsoft as well as specific components sold by companies including BEA Systems and Veritas Software.