updated 11/15/2004 5:56:21 PM ET 2004-11-15T22:56:21

After investing roughly $500 million and spending years of development time on its next-generation operating system, Sun Microsystems Inc. on Monday will announce an aggressive price for the software — free.

Sun, which has never completely rebounded from the tech collapse in 2001, hopes the no-cost of Solaris 10 will not only attract customers but also expand the number of developers who write programs that work on computers running the operating system.

The result, Sun believes, will be renewed demand for its servers and services. The company also will charge subscription fees for Solaris support and service programs that are typically sought by the businesses and organizations that Sun targets.

“Hewlett Packard sells a printer at a low price and makes a lot of money on printer cartridges. Gillette gives you the razor and makes a lot of money on the blades,” said Scott McNealy, Sun’s chief executive. “There are different ways to drive market penetration.”

Solaris 10 will be unveiled Monday at an event in San Jose, though it won’t be formally released until the end of January. It will work on more than 270 computer platforms running on chips from Sun, Intel Corp. or Advanced Micro Devices Inc.

The price of earlier versions of Solaris typically ran between hundreds and thousands of dollars — depending on the system that was being run by the software, said Tom Goguen, Sun’s vice president of operating platforms.

Pledge to make source code available
Sun also has promised make the underlying code of Solaris available under an open-source license, though the details have not been released.  With access to the code, Solaris users will be able to take advantage of its features when developing their own software and systems.

The move stands in contrast to Microsoft Corp.’s Windows and other proprietary operating systems in which the blueprints are released only to select outsiders, if any.

And, depending on the final license, it could make Solaris more competitive with open-source operating systems like Linux and distributors such as Red Hat Inc.

“When we open source, the one advantage we thought Red Hat had is gone. Then we both have an advantage with respect to Microsoft,” McNealy said.  “(Sun has) a worldwide service and support organization, which we think is way better than either company in the enterprise.”

Solaris also will run programs written for the Linux operating system without having to make any changes.

Though Sun also sells lower-end systems that run Linux, it believes Solaris is a better value proposition.  To strengthen its case, Solaris 10 will include security features that in the past were only part of a trusted version sold strictly to government agencies and the military.

A shadow on Sun
Sun, a star of the late 1990s tech boom, fell on hard times as corporate spending shrunk and rivals like IBM Corp. and Hewlett-Packard Co. started offering machines with less expensive hardware and software.

The Santa Clara-based company has been trying to return to solid footing for years, and McNealy said Solaris 10 is an important part of the company’s transformation.

“It’s kind of the tent pole — it just kind of holds up the whole deal,” he said.

Last month, Sun announced its second consecutive quarter of revenue growth, though profits remain elusive. McNealy believes the company he co-founded in 1982 has already turned the corner, though the financials have yet to show it.

“There’s always a lag with companies our size,” McNealy said. “And that’s assuming we’re not making dumb mistakes right now that I don’t know about.”

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