Sun to sell Intel-powered servers again

Sun and Intel announced a broad alliance Monday that will lead to Sun's re-introduction of an Intel-based product line, the companies said.

Under the agreement, Sun and Intel will collaborate much more closely on products than they had in the past, said Sun CEO Jonathan Schwartz during a press conference in San Francisco. "Intel has agreed to really promote Solaris to help us collectively go out and build a marketplace and an ecosystem," he said. "Solaris will now be a tier 1 operating system, in the Intel definition."

Sun will build a line of Intel servers and workstations, the first of which will be a dual-processor Xeon system, expected by the end of June. Intel, for its part, is now considering Solaris a "top tier" operating system, and the company has already had engineers working on Solaris for the past few months. Eventually, workstations and four-way Intel systems will also be added to Sun's portfolio, Schwartz said.

The engineering relationship means that Solaris will more quickly support new Intel processor technologies, and the two companies will work together to develop next-generation networking and virtualization technologies as well as ways to speed up Solaris applications running on Intel machines.

"It means that we can collaborate on the feature sets that buyers are focused on," said Intel President and CEO Paul Otellini.

Intel wouldn't say exactly how much it planned to spend to support Solaris on its processors, but the effort will amount to "hundreds of millions of dollars of investment over a multiyear horizon," said Kirk Skaugen, vice president and general manager of Intel's server group, in an interview.

The agreement will boost Solaris's profile on Intel systems in the telecommunications and financial services markets, in particular, Skaugen said. These are two areas where Intel has traditionally backed the Linux operating system.

Asked if Monday's news was bad news for Linux, Skaugen declined to answer. "At the end of the day, people will chose which operating system will produce the best value to customers," he said.

Sun had abandoned Intel several years ago, launching a line of servers with chips from AMD in late 2003. Sun also makes its own line of Sparc and UltraSparc processors.

At the time, Sun hailed AMD's 64-bit Opteron chip and planned to use it in two-and four-way servers. But now, a return to Intel chips will allow Sun to sell its Solaris OS to a wider market and to offer a wider range of options to data center administrators, who are increasingly replacing Unix machines that use RISC processors with cheaper x86-based servers, according to Nathaniel Martinez, an analyst with IDC.

The news comes as a relief to Intel, which announced another disappointing quarter of sales on Jan. 16, reporting revenue that was 39 percent lower than last year. Intel has endured a tumultuous year as Otellini has tried to recover profits by laying off 10,500 workers and selling several business divisions.