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SAN JOSE, Calif. (AP) — Sun Microsystems Inc. will begin building
servers with one-time foe Microsoft Corp.'s Windows operating system
installed directly inside of them, instead of forcing customers to
install the ubiquitous software on their own or defect to a competitor
for one-stop shopping.
The agreement announced Wednesday is the
latest twist in a truce the companies, once bitter rivals, hammered out
in 2004, when Sun pocketed $1.95 billion in a settlement payout from
Microsoft over antitrust and patent allegations, and both companies
vowed to make their products work better together.
Sun will begin
incorporating Microsoft's Windows Server 2003 software into its
so-called x64 servers, which are corporate computers that run on 64-bit
microprocessors from Intel Corp. and Advanced Micro Devices Inc.
Servers are the computers in corporate data centers that process large
amounts of data such as Internet traffic or financial calculations.
The companies said in a joint statement that Sun's machines with Windows pre-installed will be available within 90 days.
Although
Sun customers have been able to run Microsoft's operating system on Sun
servers for several years, Sun would not install it in the factory.
That left customers who wanted Windows in the lurch unless they wanted
to install in on their own or already had licensing contracts with
Microsoft, in which case Sun would install it.
Microsoft, the
world's largest software company, stands to gain from the agreement
because of Sun's reach in the server world. Sun is the world's No. 3
server seller with 13 percent of the worldwide market, behind IBM and
Hewlett-Packard Co., according to the latest data from market
researcher IDC.
The agreement includes a nod from Sun and
Microsoft to the momentum surrounding so-called virtualization
technology, which allows computers to run more than one operating
system, saving hardware and electricity costs while boosting the
performance of giant, energy-sapping machines.
Sun and Microsoft
vowed to make sure their respective operating systems worked well with
one another's virtualization technologies, a commitment that could help
both companies prosper from the trend toward data center consolidation
and urgent efforts by technology managers to reduce energy costs.
The
further embrace of Microsoft highlights Sun's attempts to shed its
image as that of a quarrelsome startup that in the late 1990s was eager
to pick public fights with big rivals. Instead, Sun is becoming a more
restrained and inclusive company willing to forge alliances, including
the announcement last month of a partnership with longtime rival IBM
Corp. that will allow Sun's Solaris operating system to run on IBM
servers.
It's a crucial element of Sun's turnaround strategy, and
a formula that Sun management said is necessary to ensure the company's
long-term financial success.
A darling during the dotcom heyday
that has lost more than $5 billion since the crash, Sun is now
broadening its product portfolio as it moves away from selling only
proprietary software and servers.
Since then, the company has made its Solaris operating system and Java technology available for free on the Internet.
Sun
is hitching its rebound strategy in part to the growing open-source
movement in hopes that it will sell more hardware and services as more
companies and programmers start using Sun's free technologies.
Sun shares fell 5 cents to $5.66. Microsoft shares finished unchanged at $28.93.
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