Sun Microsystems on Monday announced an update to its application server software along with plans to offer a free version of the product.

The company said it has released two new versions of its Sun ONE Application Server 7. The Platform Edition is available as a free download for Solaris and Windows operating systems. The Standard Edition includes additional management tools and costs $2,000 per server processor.

Sun said the new software, which is used to manage Web-based transactions between client PCs and back-end databases, is now more tightly linked to its Java development tools. The company says the new version better supports Web services standards such as Web Services Description Language (WSDL), Simple Object Access Protocol (SOAP), Electronic Business Extensible Markup Language (ebXML), and Universal Description, Discovery and Integration (UDDI).

The company also said it plans to extend its free version to the SunLinux, HP-UX, and AIX operating systems in January.

Sun's giveaway is intended to increase its share of the application server market. BEA Systems is the leader in the $2 billion market for application server software. But BEA's dominance in the market has begun to waver with increased competition from IBM and Oracle, which rank second and third, respectively, in the market overall. Sun ranks fourth with 7.9 percent market share, according to market researcher IDC.

Earlier this year, Sun announced plans to offer a free low-end version of its application server software as part of the Solaris operating system. The company said it is on track to release that version in January. Sun's giveaway could hit BEA hard as BEA sells most of its software on Solaris, running on Sun hardware.

BEA is also trying to expand its market share. Last month, the company announced plans with Hewlett-Packard to bundle a free version of BEA's WebLogic application server software with its HP-UX 11i operating system.