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Monday, Aug 16, 2004

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Sun hopes to drive growth through subscription model

Vishwanath Kulkarni

The subscription model, comprising a fixed and a variable cost component linked to the usage of the solution, will bring in more annuity business and generate 15 per cent incremental growth, says Mr Valluri.

Bangalore , Aug. 15

SUN Microsystems is looking at accelerating its growth in the Indian market through the recently launched subscription model.

Sun is offering its solutions, including hardware, software and services, on a pay-as-you-go basis, in addition to its traditional model, which involved collecting revenues upfront.

"The new model has generated lot of interest over the last two months and we expect an additional incremental growth of 10-15 per cent this year from the new offering," said Mr Anil Valluri, Country Director (Client Services).

The subscription model consists of fixed and a variable cost component linked to the usage of the solution.

"We expect this new offering to bring in more annuity business," Mr Valluri said.

Mr K.P. Unnikrishnan, Country Manager (Marketing), said: "It is a commercially viable model for the customers as it helps them move their expenses from capital expenditure to operational expenditure."

The company sees major potential for business from the telecom, banking and financial services, the manufacturing sector especially oil and gas and the retail segment.

Mr Unni said that the company sees a new phase of growth as telecom companies gear up to offer data services.

Sun has also doubled the sales of its Star Office software to around 40,000 units during 2003-04, up from 20,000 units in the previous year.

India has emerged as the fastest growing market for Sun over the last few quarters.

"We aim to grow at more than double the industry average in the current fiscal."

For the year ended June 2004, Sun Microsystems clocked 50 per cent growth in the Indian market.

Company officials refused to quantify the revenues.

However, industry sources estimate revenues to be around Rs 800 crore.

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