(Associated Press via NewsEdge) The new alliance between Sun Microsystems and Intel joins two storied Silicon Valley companies with recent financial woes in a battle for the lucrative market for corporate servers and software.
Sun, a one-time dot-com darling that has lost more than $5 billion since the tech collapse, said it would begin building and shipping later this year servers and workstations that run on Intel processors.
Intel, trying to reverse plunging profits and market-share losses to archrival Advanced Micro Devices, will officially endorse Sun's Solaris operating system in return.
Analysts said Intel's backing will be crucial in Sun's effort to gain more widespread adoption of its servers and software.
And Sun's embrace of Intel chips marks a timely design win for Intel, whose processors were shunted aside by Sun several years ago in favor of chips from AMD.
Intel, the world's largest chipmaker, has lost about 5% of the overall chip market to AMD over the past year, with AMD posting dramatic gains in the high-margin markets for servers and laptop computers that Intel once enjoyed nearly alone.
But Intel has revamped its product line with a new chip design to boost performance while giving off less heat, and analysts said deals like the one with Sun reflect a growing demand for Intel's new offerings.
The CEOs from both companies, Jonathan Schwartz with Sun and Paul Otellini with Intel, jointly announced the deal in San Francisco.
Both executives stressed the collaborative nature of the partnership and said the deal is about expanding market opportunities in areas where both companies have been weak.
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