Sun will start selling its lineup of 64-bit PC servers preinstalled with the Windows Server operating system from Microsoft within 90 days, the two companies said today.

The two longtime rivals also said they will cooperate on technical development of Microsoft's server operating system on Sun Fire hardware as well as making Sun's Solaris Unix operating system fully manageable under Microsoft's recently introduced System Center Virtual Machine Manager software.

"Management interoperability is part of our management strategy," said Andrew Lees, corporate vice president for the server and tools marketing and solutions group at Microsoft.

The moves could help Sun boost sales of its servers, which have been hurting ever since the bursting of the dot-com bubble saw the rise of cheap PC servers running either Linux or Windows.

"People who might not have in the past considered a Sun server for Windows will now consider it," said Michael Cherry, an analyst at Directions on Microsoft.

Sun has been making aggressive partnership moves. IBM said last month that it would sell PC-based servers and blades using Solaris.

For Microsoft, the tie-up could help the company compete in the hot virtualization market, where it is No. 2 to market leader VMware. Sun has long had its own virtualization technology, called Solaris Containers.

Today's announcement, the companies said, is an expansion of an initial technical cooperation agreement signed in April 2004, during which Microsoft also paid Sun $1.6 billion to settle lingering antitrust and patent disputes.

"What we have had has already produced good fruit, but we are looking forward to a significant expansion," Lees said.

Sun will also build an interoperability center on Microsoft's campus in Redmond, Wash. The companies will also expand their Internet Protocol television partnership, which involves Microsoft's MediaRoom IPTV and multimedia platform and Sun's server and storage systems.

Sun launched its Sun Fire servers two years ago as its first foray into the fast-growing PC server market. The servers run less-expensive but powerful AMD Opteron processors and start at prices of less than $1,000.

The Sun Fire servers already support Windows Server, along with Red Hat Linux, Novell's Suse Enterprise Linux, VMware's ESX virtualization system, and Sun's own Solaris operating system, according to Lisa Sieker, vice president of marketing at Sun Systems.

That allowed customers who had volume-license agreements with Microsoft to send their image DVDs to Sun and have the company preinstall Windows Server, Sieker said.

But with this agreement, Sun will now officially be able to ship servers preinstalled with Windows Server to any customer or channel partner, she said. Windows Server will still be unable to run on Sun Fire servers using Sun's own Sparc64 chips, she said.

Sun will continue to support and resell Red Hat and Suse Linux on its Sun Fire servers, she said. Future versions of those servers will also use Intel processors.

Asked if Sun's latest alliance shows its intent to compete more directly with Linux and VMware, Sieker said, "We are responding to strong customer demand for this.... It's a complex marketplace out there."

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