The Hindu Business Line : Sun Micro sees increased interest in open source applications

Bangalore, Dec. 24 Sun Microsystems India said it is seeing increased interest in open source software applications from customers as pressure mounts on them to cut costs, consolidate and run their IT infrastructure more efficiently in an economic slowdown.

The high cost of software licences is a significant part of the annual IT spend for many customers, who are trying to avoid those costs in a recessionary environment.

“Customers who could afford and adopted proprietary software earlier are now interested to try out the open source software,” said Mr Anil Valluri, Vice-President and Managing Director, Sun Microsystems India Pvt Ltd. “There is an openness to accept the concept and their attitude has changed in the past three months,” he said.

Sun is working with some 30 of its large customers on the proof-of-concept trying to showcase the benefits of switchover to open source applications such as MySQL, an open source database and messaging solutions among others. Sun expects to realise revenues from such opportunities over the next few quarters.

“The ideal fit is new projects, but what they are asking is for old,” Mr Valluri said. Customers are keen to migrate to an open source application on existing IT infrastructure. Also there are not too many new projects being attempted by customers currently, as many of them are trying to consolidate their existing IT infrastructure trying to maximise returns on their investments.

Sun, which counts the Future Group, Government of Gujarat and the Tamil Nadu Health Department among its customers, said the recession has impacted sales in India as customers delay their investments on deploying new IT infrastructure.

“You are bound to be impacted when your customers are hit,” Mr Valluri said without quantifying the impact. Sun saw its sales increase by 27 per cent in India for year-ended June 2008, compared with 35 per cent in the previous year. Sun like other multinationals does not disclose its India revenues. According to third party estimates by Dataquest, Sun’s India revenues stood at Rs 1,456 crore in 2007-08.

Besides, Sun is also worried about the currency volatility. As the rupee has depreciated against the dollar in the past few quarters, Sun has been forced to bear the brunt, especially in government contracts. However, it has passed on the burden to its consumers in the private sector deals.

Notwithstanding the slowdown and volatile currency, Sun is bullish on India. “India will continue to be an investment destination for Sun and many other companies,” he said. Traditionally strong in verticals such as telecom and banking financial services, Sun has made inroads into the small and medium enterprises, more so in tier II and III cities.