American Express Signs On With Sun Microsystems - InformationWeek

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1/25/2006
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American Express Signs On With Sun Microsystems

Amex will use Java Enterprise System technology to build new portal services for its employees and customers.

Sun Microsystems landed a major financial services customer this week, even as it reported a financial loss for its second quarter. Sun signed American Express Co. as a customer for its Java Enterprise System, a sale that puts Sun over the one-million mark in JES subscriptions.

The signing doesn't guarantee Sun's revival, but it's a definite plus for a company that wants to regain its stature among Wall Street customers. The one million figure is something of a numbers game, since each employee of a company using Sun's JES middleware is counted as a $140-per-year subscriber. Nevertheless, the sale adds a marquee name to Sun's Java customer list, which already includes General Motors and Equifax, the credit rating service. And it's a boost to Sun's drive to "take back Wall Street," a campaign it launched in September 2004 to expand sales within the financial services industry. J. P. Morgan Chase is also a JES customer.

"We'll be using Java Enterprise System for identity management and portal services," says Judy Tenzer, public affairs VP for American Express. JES is a middleware suite that includes a Web server, directory server, application server, and identity management and portal software.

American Express is not ripping out its existing infrastructure to replace it with JES, which competes with middleware from IBM and BEA Systems. But Amex is basing its development of new portal services for both customers and internal employees on the Java software, Tenzer said.

Identity management is one of the JES suite's strongest cards. American Express is a natural candidate for Sun's identity management technology because it is already a large user of Sun Solaris and the operating system is well integrated with the JES suite, says Jim McHugh, Sun's senior director of software portfolio strategy.

American Express will use JES to build services around services-oriented architecture principles, McHugh says. That makes it a candidate to use integration and composite-application software acquired through Sun's purchase of SeeBeyond Technology in August, he says. American Express also will acquire Sun's full portfolio of Java development tools, NetBeans and Java Studio, which ship with the JES suite.

Sun would not disclose a dollar value for the deal or say how many Amex employees are covered by it, at the request of American Express. American Express has over 42,000 employees in the U.S. and another 37,000 worldwide. If the standard JES subscription price of $140 were applied to U.S. employees alone, the deal would be worth about $6 million.

On Tuesday Sun reported a loss of $223 million on revenues of more than $3.3 billion for its second quarter ended Dec. 25. Revenues were up 17% compared to $2.8 billion in the same period last year. About $145 million of the loss was attributed to the cost of recent acquisitions, and another $10 million to restructuring charges, according to Sun CFO Steve McGowan.

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