Microsoft, Sun bury the hatchet

Companies agree to make products work better together

Sun Microsystems said Friday that it has entered into a "broad cooperation agreement" with Microsoft and settled all outstanding litigation. Microsoft will pay Sun $700 million to resolve all pending anti-trust issues and $900 million to resolve all patent issues, the company said.

The deal has broad implications for customers and may result in improved collaboration between their competing Java and .Net platforms, the companies said.

After years of legal wrangling, Microsoft and Sun agreed not to sue each other regarding any past patent infringement claims and to begin negotiations for a patent cross-license agreement.

Declaring a new relationship between itself and Microsoft, Sun also said that the companies have agreed to enable their products to better work together and have entered agreements on patents and other issues.

The agreement includes technical collaboration, giving the companies access to each other's server technologies, as well as Sun's licensing of Microsoft's communications protocols and Microsoft’s support of some Sun products.

The two companies will initially cooperate on Windows Server and Windows Client, but they could eventually work together on e-mail and database software. For example, engineers from both companies might collaborate on problems such as user identity management, allowing easier information sharing between Microsoft's Active Directory and Sun's Java System Identity Server identity management products.

Also under the agreement, Microsoft and Sun will improve collaboration between the Java and .Net technologies, and Microsoft will continue to provide product support for the Microsoft JVM (Java Virtual Machine) in its products.

Sun will receive Windows Certification for its server products. The companies announced Windows certification for Sun's Xeon servers, effective immediately. Certification for Sun's Opteron-based servers is "moving forward," the companies said.

Analysts questioned whether the relationship can go deep enough to create major changes. Teney Takahashi, an analyst at Radicati Group said the companies may not have a very strong alliance but at least future products will work together.

“If they get the JVM spec closer to the CLR [Common Language Runtime] spec, the virtual machine for .Net, and vice versa it will be good for long-term computing,” said Sheldon Monteiro, vice president of IT at Sapient.

Monteiro also believes that because Scott McNealy has been so outspoken in the past about his dislike for Microsoft it may be difficult for Ballmer to work closely with his former rival.

While Sun controls the Java standard, however, they do not actually control its direction. Monteiro said IBM and BEA control about 70 percent of the market. “Roughly 40 percent of WebSphere and WebLogic are proprietary extensions of the Java standard,” he said.

This settlement might help Sun, under guise of .Net interoperability, take back control of Java from the other two vendors.

Both Sun and Microsoft have agreed to pay royalties for each other’s technologies, with Microsoft making an up-front payment of $350 million and Sun making payments whenever it uses Microsoft’s technology in its server products, company executives said.

Sun also announced that it promoted Vice President of software Jonathan Schwartz to president and COO.

Copyright © 2004 IDG Communications, Inc.