"It's a licensing scheme that is the dissolution of boundaries between external and internal divisions," he said.

With a platform bundle that includes Web and applications services such as its Sun ONE Directory and identity servers, messaging, calendar, portals, network availability via its Sun Cluster, and built-in authentication and security services, Orion is Sun's answer to rivals such as Microsoft, IBM and HP , all of whom are carving out their own software platforms.

Schwartz was coy on specifics of Orion pricing, but hinted it wouldn't be that far from the pricing model for Sun's "MadHatter" project, the system vendor's Microsoft-compatible, Linux-based desktop package of applications that also includes its own JavaCard security authentication tier.

Although the final cost is being finalized, Schwartz said the pricing for the MadHatter bundle would be in the range of $50 and $100 per desktop per year.

Whether the MadHatter desktop bundle, which includes the ability to connect to MS Exchange, Sun's StarOffice application suite, a Mozilla browser, Java 2 (define), Gnome 2 and Linux, is also going to be tied in with Sun's Orion project, Schwartz would only say "stay tuned." Sun's beta information site lists the MadHatter Management Server as part of its communication and messaging bundle.

The other idea behind the one-stack-fits-all approach with Orion, he continued, is to help enterprise customers cut down on the number of different licensing headaches across their networks, such as open source versus closed source licenses, by the mailbox or CPU, or internal versus external systems.

But to get by-employee, one-stop pricing for Orion, customers will have to run the entire SunOne bundle of servers and systems, Schwartz said. For example, if a company is running a BEA application server, the pricing scheme is the same.

Orion will also make sure that all of Sun's software products are on a same quarterly upgrade schedule. This way, he quipped, a company's IT staff that had to integrate different installations and application upgrades can "now go work on higher value activities."

Although it posted a profit of $12 million for the second quarter, revenue fell by 12.8 percent to $2.98 billion from $3.42 billion during the previous quarter. Sun said the slump was a continuation of worldwide lackluster demand for servers.

After weathering a three-year period in which IT budgets in its stronghold sectors -- telecommunications and financial services -- essentially collapsed after the technology bubble burst, Sun is looking to expand into new markets, with its aggressively-priced bundles of servers and systems leading the way.

In pricing Orion by a per employee charge, Sun is looking to eliminate the need for companies to be audited regarding their software usage, he said.

Whatever employee head-count companies file with the SEC will dictate the number of licenses they purchase. "We won't audit our customers," said Schwartz. As for private companies, "we'll take their word for it on an annual basis."

Schwartz said Sun believes that the bundled approach to selling to customers will cause two things to occur. "It will take the middleware industry such as it exists today, and collapse the somewhat monopolistic rents that folks have been able to get from locking customers in, into a much smaller market, in which we will take a much larger share."

By that, Sun means it is looking to take market share away from rivals such as Microsoft, IBM and HP, with similar strategy of bundling servers and systems in one stack.

The Orion platform offers one messaging service, one directory for infrastructure, one identity and provisioning infrastructure, he said.

In the process, Sun is offering customers a simple, two page license, one that essentially presents all of Sun's middleware bundled into its operating system and sold for one price.


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