By Stephen Shankland
Tuesday, January 23 2007 11:15 AM
URL: http://www.zdnetasia.com/news/hardware/0,39042972,61983930,00.htm

SAN FRANCISO--Sun Microsystems announced Monday that it will resume selling servers with Intel's Xeon processor, restoring a hardware partnership and extending it to software collaboration.

As reported earlier, Sun will begin selling dual-processor Xeon servers in the first half of the year, and Intel will provide engineering resources to optimize Sun's Solaris operating system. With the move, Sun becomes the last of the four tier-one server sellers to rely jointly on x86 processors from Intel and AMD.

"This is a market-changing event," Sun Chief Executive Jonathan Schwartz said at a news conference here with Intel Chief Executive Paul Otellini. "It totally changes the perspective a customer has on how they can do business with Sun and how they can do business with Intel."

Otellini gave a vote of confidence for the x86 version of Solaris chips, which Sun nearly canceled a few years back. "Solaris is evolving as a mainstream operating system, and it's evolving in terms of the equipment Sun ships," Otellini said. He alluded to the fact that Dell, IBM and Hewlett-Packard rely on others for their x86 operating systems: "Sun is in the relatively unique position of being the operating system supplier and doing the hardware."

Intel engineers will help ensure that Solaris rapidly supports new features in Xeon chips and related Intel technology, including power management and input-output acceleration, the companies said.

The alliance means AMD no longer enjoys its exclusive status as the supplier Sun relies on to power its relatively recent foray into the x86 server market. Sun had stepped away from Xeon in late 2004, but now there's reason to come back: "Woodcrest and Clovertown are substantially improved technology," Fowler said, referring to the dual-core and quad-core Xeon processors geared for dual-processor servers.

AMD professed to be unruffled by its ally's move.

"AMD believes in competition as a positive force," said Henri Richard, AMD's chief sales and marketing officer, in a statement. "Sun was among the first to listen to its customers and offer choice through AMD to a long-monopolized x86 server market. As advocates for choice, AMD recognizes Sun's desire to provide the same for its customers."

Sun will begin selling dual-processor systems in the first half of 2007, said John Fowler, Sun's executive vice president for servers. The company said four-processor systems will come out by the end of the year. Sun also plans single-processor systems and workstations using Xeon.

Sun is working on higher-end systems with eight processors, Schwartz said. That "big iron" focus of Sun is one reason Intel was interested in the partnership.

"Sun does uniprocessor systems, but that's not their focus. As you go up the food chain (with larger multiprocessor servers), their engineering competence becomes more and more significant, and their market share becomes more and more significant. That's where their strengths lie," said Pat Gelsinger, general manager of Intel's Digital Enterprise Group.

The schedule will be "hectic but doable," Insight64 analyst Nathan Brookwood said.

Sun isn't just starting today, though, noted Fowler. "Our work on the systems began a few months ago," he said.

Sun will also sell servers using Intel's "Tigerton" Xeon, quad-core chips due in the third quarter of 2007 and designed for four-processor servers, Gelsinger said.

Competition with resurgent Intel has taken a toll on AMD, which warned last week of lower-than-expected financial performance. But Brookwood believes AMD holds a relatively safe position in the server market.

"In terms of servers, I don't know (that) there's a lot of price competition," he said of AMD's business. Intel said last week that its average selling prices for server chips increased in the last quarter.

Sun's change of heart reflects the competitiveness of the x86 server market. The Santa Clara, Calif.-based company's move comes just months after Dell moved in the opposite direction, adding AMD to a previously Intel-only line, and IBM launched its first full-fledged AMD server line.

After years of selling servers using only its own Sparc processors, Sun began its intially lukewarm push into the x86 server market with the Intel-based LX50 systems in 2002. However, Sun's more serious "Galaxy" x86 models relied on AMD's Opteron beginning in 2005.

Sun has never ruled out a return to Intel processors, and there have been indications that the companies were working together. For example, Andy Bechtolsheim, Sun's top x86 server designer, made an appearance at the Intel Developer Forum in September.