Sun Microsystems released two bundled packages of Java software on Wednesday - one for desktops and one for servers - along with pricing moves intended to bolster its position in the Java software market.

Sun's Java Enterprise System, a package of tightly bundled server software, is available now for US$100 per employee. It includes Sun's application server, directory server, portal server and around a dozen or so other products. It was announced in September and is offered as an alternative to buying the products separately.

Sun also released its Java Desktop System, a suite of open source products designed to compete with Microsoft's Windows and Office software. The desktop system includes a version of Linux, the Mozilla Web browser, Sun's StarOffice productivity suite and several other products. It is also priced at $100 per employee, or $50 for customers who also buy the Enterprise System.

Hoping to spur wider use of its software, Sun said that businesses with fewer than 100 employees could download the Java Enterprise System for free (minus any services and technical support). In addition, it announced pricing of $1,000 per processor for embedded OEMs (original equipment makers) and independent software vendors, who, it hoped, would bundle the software with their products.

On the desktop side, businesses can get the Java Desktop System for half the list price if they buy it before 2 June next year, Sun said.

The announcements were made at a press conference in Berlin and are part of Sun's quarterly release of new products and upgrades. Along with the software news, which also includes updates to Solaris, the company announced new hardware, including its first server based on a processor from Advanced Micro Devices (AMD).

Sun has reported several quarters of declining revenue, battered by an ongoing slump in sales of its higher-end Unix servers. As part of a turnaround strategy it has been promoting its software more heavily as a way of generating new business. The products compete with offerings from IBM, Microsoft, BEA Systems, Oracle and others.

Sun says its Java Enterprise System is less complex to use and maintain than software from other vendors, in part because the products have been tightly integrated and are upgraded all together each quarter. It also says businesses can save money under the per employee pricing system, which is based on a company's total headcount as reported in regulatory filings.

While the offer may sound compelling, the test will be how well Sun executes on its plan, analysts said. Until the Java Enterprise System has been put through its paces by customers it's too early to say if it will live up to Sun's promises, said Stephen O'Grady, a senior analyst with the consulting company RedMonk.

"It looks like a good offering and it's something that's been getting them a lot of attention, but whether that will translate into sales remains to be seen. Our general line is that a lot depends on how well Sun executes, how well the software actually performs," he said.

Sun didn't manage to get all of its server products into the first release. Its integration server won't be included until the fifth release, according to a roadmap on Sun's Web site, which could be as much as a year away. The high-end version of its application server, which includes clustering and other advanced features, also isn't included yet.

Customers who aren't interested in Sun's software may still benefit from its pricing because it provides them with added leverage to negotiate better deals with other vendors, RedMonk's O'Grady said.

Sun's goal is to get its software into the hands of as many customers and developers as possible - even if it means giving the software away for free to customers who wouldn't otherwise buy it, such as small businesses, said Jonathan Schwartz, Sun's executive vice president in charge of software.

"We look at software in general at Sun as a way to open new markets. Whether we give away a product for free and upsell or upgrade, or give the Java runtime away for free and sell the desktop, we are focussed on pursuing market expansion with software, then we'll monetize it by selling other software and services and systems," he said.

Wider use of the software will encourage more ISVs to port their software to the Java platform, according to Schwartz - he offered the example of financial applications developed for IBM mainframes. It will also help to ensure a steady supply of developers with skills in Java, he said.

The Java Enterprise System is available for Solaris running on Sun's Sparc chips and on x86 chips from Intel and AMD. Next year it will be offered on Linux and Windows, which should also help proliferate the use of the products, Schwartz said.

Sun is also willing to drop the price of its desktop software in exchange for wider distribution. It struck a deal recently to provide China Standard Software Co. (CSSC), a consortium of technology companies that does work for the government in China, with as many as 1 million seats of its Java Desktop System.

"As we move to deals in the millions we need to look at a pricing scheme that lowers the barriers to entry. ... One way is by setting up a 'per citizen' price, likely based on the GDP (gross domestic product) of a country, and using that as a mechanism to cultivate new market opportunities for Sun," Schwartz said.

Analysts have questioned how much money Sun stands to make from the deal in China. Schwartz declined to say what price the Chinese government is paying for the software, but insisted that Sun stands to profit considerably from the deal.