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In a collaboration that one CEO called “historic,” Sun Microsystems and Intel jointly announced a new partnership that will see both companies support the other’s technology.

The announcement, which had first been reported in the Wall Street Journal and formally detailed at a joint news conference in San Francisco on Jan. 22, will allow Sun to develop x86 servers using Intel’s Xeon processors.

For Intel, the new partnership will also mean that it will start to support and promote Sun’s Solaris operating system. Intel will also encourage ISVs (independent software vendors) to support Solaris on Xeon technology. During the announcement, Intel executives said that company will also endorse Java and NetBeans products, as well as OpenSolaris and open Java.

Sun CEO Jonathan Schwartz and Intel CEO Paul Otellini made the joint announcement at the event.

“For us, it’s an historical moment,” Schwartz told the audience.

The first Sun x86 servers to use Intel’s Xeon processors should hit the market by the second half of 2007, although Schwartz and Otellini did not give a firm date for the official launch. These new products will give Intel a better foothold in enterprise space, especially with telecommunication companies.

After turning away from Intel processors, Sun has used Advanced Micro Devices’ Opteron processors in its x86 server line. With the Jan. 22 announcement, Sun will join its larger competitors—Hewlett-Packard, Dell and IBM—as major IT companies that offer both AMD- and Intel-based systems.

While Sun has used AMD’s processors exclusively for the last few years, it never fully closed the door on the possibility of using Intel in some of its x86 server products.

Sun also produces its own line of multicore processors for its servers as well. In addition to the UltraSPARC T1 processor, which uses eight cores, Sun is preparing to release its latest processor—called Rock—in 2006. Rock will use 16 cores.

Click here to read more about Sun and its Rock multicore processor.

When the Rock processor is released in 2008, Sun is planning to include it in its mid-level and high-end servers.

The announcement comes a day before Sun is scheduled to announce its latest quarterly results on Jan. 23.

By going more mainstream, Sun’s Solaris would be better able to compete with both Microsoft’s Windows operating system as well as Linux. During the announcement, Schwartz said that by using Intel, Solaris can now be seen as a top-tier operating system within the enterprise space.

For years, Sun has struggled in the server market, although several recent surveys by IDC and Gartner have shown that Sun has started to pick up some of its lost market share. Since taking over the company in April 2006, Schwartz has also tried to reinvigorate the company, specifically by pushing the use of AMD and its own “Niagara” processors.

Click here to read more about Schwartz’s plans for Sun and its future.

The move to include Intel, which has already released seven different Xeon quad-core processors for servers, would seem like a natural extension of the plan that Schwartz has envisioned for the company.

The announcement will also mean a big boost for Intel, which has been aggressively trying to take advantage of its quad-core offering. AMD, which also has a quad-core chip in development, will not release its processor until later in 2007.

The two chip makers have been aggressively jockeying for the upper hand in the market for the past year. Intel stuck first when Apple announced that it would start using its processors in Macintosh desktops and notebooks. AMD scored some points when Dell announced that it would start using its Opteron processors.

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