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As executive vice president for software at Sun Microsystems, Inc., Jonathan Schwartz isn’t exactly a neophyte when it comes to dealing with the press. But he wasn’t prepared for the press reception he got in Beijing recently when a Chinese deputy minister, flanked by a phalanx of some 100 reporters, heartily thanked him for the “contribution Sun made to the development of China.”

That contribution was not a gift or a monetary contribution from a US multi-national corporation to the world’s most populous country, it was a free distribution (of sorts) that Sun announced in December at the Sun Network conference in Berlin. Sun now makes its Java Network Stack freely available to any employer with fewer than 100 employees.

Surprised? If you are, you’re not alone. Sun announced the program “very quietly,” according to Schwartz. Perhaps a bit too quietly.

Since the Eclipse Foundation broke ranks with IBM and established its independence last month, industry pundits and members of the open source Eclipse Foundation have chided Sun for its refusal to join. But two months prior, the company took some baby steps toward opening its platform to independent developers. And in some parts of the world that move caught fire. China, where small businesses proliferate, placed it in the hands of developers who have already put it to work to serve some 250 million small business employees.

Sun’s move to crack open its network stack had little to do with Eclipse. It’s just one in a series of smart moves Sun is making to court the channel in an effort to move downstream into the small to mid-sized business (SMB) market, a market that–for Sun–remains largely untapped.

Sun courts the channel

Sun courts the channel Schwartz acknowledges “We don’t have channels to effectively address and support small business. For our business to grow we cannot simply serve our installed base. Growth occurs at someone’s expense or growing the overall market. Bridging the digital divide means growing the market. We’re hoping to use this as a way to build the channel. One of the single biggest impediments to the growth of your business is the software license. We’ll give you the stack.”

Steve Borcich, executive director for Java Enterprise Systems and Security Marketing, noted that there’s a lot that’s free and attractive in the deal, even for companies of more than 100 employees that must pay the $100 per seat license, because the fee applies to employees only.

“The most leverage you can get out of this,” Borcich pointed out, “is if you want to open a web presence. We don’t charge for the extended customers that puts into play. We only charge you for your employees. We want to encourage you to grow your business and make it Web-enabled.”

By making the stack free to developing companies, it hopes to capture the loyalty of customers who will remain with it as their own companies grow. And the stack is only one of two significant freebies Sun is using to drive the market.

In another move to court smaller businesses, Sun announced just last month that it would give a Sun V2OZ entry-level Advanced Micro Devices Opteron-based server free to any US developer who signs up for a three-year subscription to its Java-based enterprise development tools. And according to Borcich, there are more announcements down the road.

“Classically, Sun has been seen, certainly, as a Web enabler,” said Steve Borcich, executive director for Java Enterprise Systems and Security Marketing. “We work a lot with service providers. We work with a lot of enterprise providers. We’re working with channel partners to try to open up and extend Sun’s reach into medium business.”

Carol Ellison is editor of The Ziff Davis Channel Zone. Write to her at carol_ellison@ziffdavis.com.