Select Committee on Education and Skills Minutes of Evidence


Memorandum submitted by Sun Microsystems Limited (EU 5)

INTRODUCTION

  1.  Sun welcomes the opportunity to give account of its involvement in the UKeU project.

SUN IN EDUCATION

  2.  Sun as a company started 21 years ago in higher education (SUN stands for Stanford University Networks) and has always maintained a strong focus on this sector. To this end Sun has a dedicated global line of business (that has existed since its inception), which focuses exclusively on the education and research community and includes all education establishments from nursery schools through to further education colleges and Universities.

  3.  Sun has a number of formal programmes to complement the on-going account management activities including the Centres of Excellence programme spanning teaching, research, entrepreneurship, and hiring, providing avenues for partnership between Sun, educational institutions and third parties. In the UK, Hull University, Oxford University, University of Edinburgh and Imperial College, London all are accredited Sun Centres of Excellence. Sun is also currently a leading member of all established eLearning international standards bodies.

BACKGROUND TO SUN'S INVOLVEMENT IN UKEU PROJECT

  4.  Sun believes that a massive increase in the use of eLearning is essential if the increase in student numbers (including lifelong learning) that must occur is to be achieved. Further, Sun believes that eLearning should be based upon an open standards framework such as that defined by Joint Information Systems Committee and the global learning consortia IMS which ensures that the eLearning world stays open, competitive and gives users best value for money.

  5.  Sun believed that the UKeU had the potential to be a major force in the growth of the use of eLearning and accordingly it wished to work in partnership with UKeU to achieve this. Sun viewed its investment as furthering Sun's and the UK education's strategic goals while creating a joint business stream of great value to the UKeU, UK Universities and Sun.

SUN'S INVOLVEMENT IN UKEU PROJECT

  6.  In November 2000, Sun responded to the initial invitation for expressions of interest in a joint venture to create UKeU that was advertised in the Financial Times. The goal of the tender was to select a private company that would be willing to invest in the new UKeU. The OJEC tendering process was used and through a series of selection processes, Sun was eventually selected as the private sector partner.

  7.  Sun's proposal included the following main points:

    —  Sun invests £5.5 million into the UKeU;

    —    Shares of equivalent value in UKeU created by Sun's investment were to be gifted to a charitable trust set up for the benefit of UK higher education institutions;

    —    Sun would work in partnership with the UKeU to sell the companies products (including the eLearning platform) worldwide; and

    —    Sun would provide marketing assistance.

  8.  In October 2001 Sun and UKeU entered into a Strategic Agreement which captured the above mentioned points of Sun's proposal.

  9.  In November 2001 UKeU issued through the OJEC tendering process a request for proposals for a Platform Systems Integrator and Datacentre Managed Services Provider for the eLearning platform.

  10.  In February 2002, through this competitive tendering process, Sun was selected by UKeU to be the Platform Systems Integrator and entered into a supply agreement with UKeU to deliver a basic eLearning platform with minimal functionality that was known as ELP 0.1 or the interim release ("Interim Release"). The Interim Release was intended to be an interim solution to give UKeU a production eLearning platform to deploy courses, attract students and become self-funding as soon as possible.

  11.  In July 2002, partway through development of the Interim Release, the UKeU renegotiated the contract with Sun and the parties agreed to implement a full version with more functionality known as ELP 1.0. The total fixed contract price for both Interim Release and ELP 1.0 was initially £9.65 million, but as a result of a number of requests for change to specifications by UKeU during development, this was revised with agreement between the two parties to approximately £11.7 million.

  12.  In March 2003, the Interim Release was delivered and deployed in a live environment and students commenced UKeU courses on the eLearning platform.

  13.  In May 2003, the parties agreed in a stage plan, for ELP 1.0 to be delivered in modules comprising ELP 1.a, 1.b, 1.c and so on with 1.h as the final module ("Stage Plan"). Under the Stage Plan, UKeU would pay 10% of the contract price on signature of the Stage Plan and a certain percentage of the contract price on acceptance of each module by UKeU.

  14.  Sun delivered the modules and acceptance certificates were signed by UKeU between 29 May 2003 and 3 June 2004.

  15.  The Interim Release and each module as it was accepted by UKeU, was deployed into a live environment. At the time of delivery of final module ELP 1.h, there were approximately 140 students using the eLearning platform.

  16.  On acceptance of each module by UKeU, Sun issued the relevant invoice. Approximately £4.2 million in total was invoiced for modules ELP 1.a-1.f which UKeU failed to pay.

  17.  In October 2003 Sun commenced negotiations with UKeU for payment of the outstanding invoices while continuing to deliver technical helpdesk services and continuing development of final module ELP 1.h in accordance with the Stage Plan.

  18.  In November 2003 following the above discussions, UKeU paid approximately £1.3 million in total to Sun which reduced the invoices outstanding.

  19.  In March 2004, HEFCE appointed Robson Rhodes as administrator of UKeU. Sun UK senior management had on-going meetings with Bob Stubbs, from Robson Rhodes, who was appointed as Executive Deputy Chairman of UKeU.

  20.  In 9 June 2004 a further payment of £880,000 for previous modules was made on delivery and acceptance by UKeU of final module ELP1.h.

  21.  In 18 June 2004, UKeU served a notice of termination of the supply agreement on Sun effective immediately with work and invoices remaining unpaid.

CURRENT STATUS OF THE ELEARNING PLATFORM

  22.  Sun has performed no further work on the eLearning platform since termination by UKeU. Sun has however, had several discussions with HEFCE to discuss how the jointly owned intellectual property rights in the eLearning platform may be deployed in a free community source form to benefit the UK education community.

CONCLUSIONS

  23.  Sun continues to invest in education and would be willing to participate in a similar project in the future. Sun is committed to the development of open eLearning and believes that the initial goal of the project was a valid one, and the type of eLearning environment that it sought to bring about, will be essential in the future if the number of students and life-long learners is to increase.

6 January 2005





 
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