Galaxy Z Flip 4 Preorder Quest 2: Still the Best Student Internet Discounts Best 55-Inch TV Galaxy Z Fold 4 Preorder Nintendo Switch OLED Review Foldable iPhone? 41% Off 43-Inch Amazon Fire TV
Want CNET to notify you of price drops and the latest stories?
No, thank you

Sun eyes application server market

The company, trying to chip away at the dominance of BEA and IBM, is expected to announce that it is bundling its application server software into its Solaris operating system.

Sun Microsystems is expected to announce Wednesday that it is bundling its application server software into its Solaris operating system, a move that could change the competitive landscape in a lucrative market.

As part of the upcoming Solaris 9 operating system, sources told CNET that Sun will essentially give away its Java application server. With the move, Sun is trying to chip away at the dominance of BEA Systems and IBM in the $2 billion-a-year application server market.

Sun is expected to make the announcement Wednesday when company executives, including Chief Operating Officer Ed Zander, launch the latest version of the company's Unix operating system, sources said.

Application server software is technology that runs e-business and other Web site transactions. It's essential back-end software that has become a standard piece of e-business infrastructure.

Sun's move directly targets BEA, since the company sells most of its software on the Solaris operating system running on Sun hardware. By offering a free application server inside Solaris, Sun could lessen the need for customers to buy its application server software from others, sources say.

IBM, which sells its own hardware and typically bundles sales with consulting contracts, is less affected by the move. But a more full-featured Solaris might sway customers to Sun's hardware.

Anil Gadre, Solaris general manager at Sun, declined to comment on the particulars of the launch, but said the company is moving toward integration. "Customers are (telling Sun), 'We need you to do more of the integration work that I do today,'" Gadre said Tuesday.

BEA executives on Tuesday said that Sun's new application server strategy will not hurt BEA's sales. Eric Stahl, a BEA product marketing manager, said he believes BEA's innovation and technology will beat even a free price tag.

"BEA's WebLogic application server is a proven leader in ensuring the success of projects. Making a decision based on free access is not what our customers want to ensure success," Stahl said.

In 2001, Sun ranked No. 3 with 7 percent of the application server market, far behind BEA and IBM, which each control 34 percent, according to Giga Information Group. Oracle is at Sun's heels with 6 percent.

Sun is trying to bring more features into its Solaris operating system as it tries to keep its market share lead against reinvigorated server competitors IBM and Hewlett-Packard, which are putting a lot more energy into development and winning the support of other software makers.

The new version of Solaris includes better performance, security, management features and "partitioning," which lets several operating systems run on the same hardware. Sun also is working to add Linux compatibility features.

But with resurgent interest from HP and IBM, Sun doesn't have the Unix world to itself the way it did in the late 1990s, said Giga Information Group analyst Brad Day.

Two years ago, "when you'd think of Unix and think of the culture and community built around it, you'd say without question it was a Solaris game. But I think as we move through 2001, it looks like it's back to a more competitive three-legged race," Day said.

Sun isn't the first software maker to integrate its application server with its operating system. About two years ago, Microsoft built its application server features into its Windows server operating system. Microsoft's application server technology was originally sold as separate products in the late 1990s, but tepid sales convinced Microsoft executives to embed the technology into the Windows 2000 operating system, analysts say.

HP, which owns 4 percent of the application server market, announced last fall it was giving away its own core application server for free, while charging customers for advanced features and add-on technology.

Sun may follow a similar plan, sources said.

Microsoft has also begun to more aggressively market its application server. The software giant is courting software developers, who have a choice between Microsoft's new .Net Web services plan or rival software sold by Sun, IBM, BEA, Oracle and other Java backers. Software makers have raced to sell the tools and e-business software that allow business customers to build Web services, a more efficient way to build software, allowing businesses to more easily conduct transactions with each other online.

CNET's Stephen Shankland contributed to this report.