Struggling Sun Microsystems Opts for Subscription Model

ACS, itself an outsourcer of information technology services, will get its computing infrastructure -- that is servers, storage, and software -- from Sun. In turn, ACS provides information technology services for a variety of clients, adding value and reselling what it buys from Sun at a markup.

In a traditional sale, ACS would buy the products either separately, or more likely as part of package deal, but would own them and carry them on the balance sheet. Instead, Sun owns the products and collects revenue at intervals depending on usage by ACS.

Large customers may instead opt to skip the service provider and deal directly with Sun, Singer noted.

How the market will treat Sun's new strategy is unclear, of course. But lower sales revenue won't be popular. On the other hand, "Sun's business is already troubled," Gardner noted. "Taking a hit immediately and getting the bad news out of the way could make sense."

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