The Indian subsidiaries of Sun Microsystems and Oracle have entered into a strategic alliance to offer low-cost computing in the Indian market, focusing on the banking & financial services, insurance and telecom sectors.

Though the two IT majors have been jointly marketing their products and applications in the high-end enterprise segment, they are entering the low and medium segment, dominated currently by the NT and Unix servers.

As part of their global strategy to expand the base of open source code and Linux operating system, Sun and Oracle will provide solutions to reduce the cost of ownership by about 70 per cent and ensure an early return on investment.

"Currently, the NT server market in India is about $70 million, while the Unix server market is estimated to be about $80 million.

"Pricing our products and services in the range of $2000-4000, we will be targeting those customers looking for alternative offerings in the sub-$10,000 price tag," declared Sun Microsystems India managing director Bhaskar Pramanik in Bangalore on Wednesday.

In place of the high-cost proprietary products of Microsoft in the server and desktop segments, the partners will bundle Oracle collaboration suite with Sun's StarOffice software to run on Sun's multiple platforms, including Solaris and Linux.

"The open standard architecture of our products will bring scalability and reliability to low-cost servers running mission critical applications. We intend to simplify access to technology and support for developers by sharing information and services," Pramanik stated.

In view of the increasing use of information and communication technologies by the services sector, thanks to a dramatic improvement in the Indian telecom infrastructure, the banking & financial and insurance sectors have emerged as leading customers in tech spending.

According to independent surveys, the Indian banking & financial services and insurance sectors have been growing at a steady rate generating a business of $34 billion and $17 billion respectively.

"With tech spending by these sectors constituting 2-3 per cent of their turnover, the low-cost computing market offers enough opportunities to grow our market share exponentially," claimed Oracle India managing director Shekhar Dasgupta.

In the burgeoning telecom sector, the entry of multiple players to provide diverse service offerings has created a huge market for the deployment of Oracle's database on Sun's N1 platform.

The increasing use of Internet and mobile computing to offer a host of value-added services ranging from messaging, anywhere, anytime banking through ATMs, billing, and customer care in making banks and telecom firms invest heavily in converging technologies for reducing the cost of ownership and optimize returns in shorter cycles of 90 days.

In the banking sector, ICICI Bank and Punjab National Bank have already gone in for Oracle software/applications and Sun workstations to increase operational efficiency and enhance productivity.