HP Application Server 8.0, which was launched this week, will still require payment of an annual fee, but this is likely to be per-server and not on the higher per-CPU pricing favoured by rivals.
Steve Glagow, HP Netaction marketing manager, said: "Final pricing for service and support for our application server is still under discussion, but it's going to be around $5000 (£3,430) per year."
HP's move makes its application server significantly cheaper than IBM's Websphere - which costs between $7,000-$35,000 per CPU - and BEA, which charges around $10,000 per CPU.
HP Application Server 8.0 is a J2EE-based platform that will run any Java-compliant application over the Internet. It is based on the Bluestone Application Server that HP inherited, with its acquisition of Bluestone Software last year.
Analyst firm Gartner has predicted that the application server will become a commodity product. HP's decision to essentially give away its application server confirms this view.
Last month, Gartner gave HP just 4% market share, compared to BEA's 41% and IBM's 31% of the application server market.
HP's announcement is likely to anger BEA, which has partnered HP in areas such as interoperability while working with large joint customers such as General Motors and Samsung.
Glagow refused to speculate whether HP's price-cutting would undermine BEA's Weblogic application server. "We believe the customer is king. If they want to use BEA instead then we're happy." he said "As long as they [BEA] keep to recognised standards. If they don't, then it will be tough on them."
HP will not be reducing the price of its application server development tools. The company would not clarify if subsequent application server releases would also be freely distributed.