In an effort to get its StarOffice 7.0 productivity suite in front of more users, Sun Microsystems Inc. has signed an agreement with America Online Inc. to preload the software on the new US$299 desktop computers that AOL will offer customers.
In a deal announced Thursday, Sun said it will provide StarOffice 7.0 to help AOL keep costs low and give users compatibility with Microsoft Office files — while giving Sun an important product showcase.
The software will be called AOL Office on the consumer desktop machines.
Iyer Venkatesan, a Sun desktop solutions product manager, said the two companies began discussions on the deal about a year ago. AOL will provide marketing and distribution for the entry-level computers, while Sun will provide the office suite and related support. “Really, it’s a good match,” Venkatesan said.
“What this AOL deal is doing is getting us into the mainstream in the U.S. market,” he said. “Here is a partner with expertise in the consumer space and who can get the word out to consumers” about the features of the software. “This is really a key win for StarOffice. It does validate our business strategy around this kind of software.”
Laura DiDio, a software analyst at The Yankee Group in Boston, said the deal is a shrewd one for Sun. “In a Windows world, it’s hard to get a toehold,” she said. “But if you ink a deal with AOL with these US$299 computers, that’s a smart deal.”
For most users, especially the consumers at whom the US$299 machines are aimed, StarOffice offers all of the features and usability they will need. “It’s a nice, neat little package,” DiDio said of the suite.
More importantly, by placing itself before AOL’s base of 33 million global users, Sun could re-establish itself in the IT world after several tough years, she said. “They are doing everything they can to try to get back in the game,” DiDio said. “They’re really getting back on track.”
The new AOL Optimized PCs will sell for US$299 and will require a 12-month AOL membership at US$23.90 a month. Initially, the machines will be sold in Office Depot stores, with other retailers to follow, according to Dulles, Va.-based AOL.
The machines will offer a 2GHz Intel Corp. Celeron processor, Microsoft Corp. Windows XP Home operating system, 256MB RAM, a 40GB hard drive, a 52x CD-ROM drive, a 56Kbit/sec. modem, built-in Ethernet capabilities, a 17 inch monitor and the latest version of AOL’s online software.
“We’re addressing the needs of the millions of (potential Internet users) who are first-time PC buyers or novice computer users,” Kenn Turner, general manager of AOL Key Audiences division, said in a statement. “They’ve told us that affordability and an interest in making one simple buying decision for everything they need to use the computer and get online is important to them.”
