Sun entered into a broad collaboration arrangement with Microsoft to enable their products to work better together and to settle all pending litigation between them. The companies have also entered into agreements on patents and other issues.

The agreements involve payments of $700 million to Sun by Microsoft to resolve pending antitrust issues and $900 million to resolve patent issues. In addition, Sun and Microsoft have agreed to pay royalties for use of each other's technology, with Microsoft making an up-front payment of $350 million and Sun making payments when this technology is incorporated into its server products.

Scott McNealy, chairman and chief executive officer, Sun said, "This agreement launches a new relationship between Sun and Microsoft -- a significant step forward that allows for cooperation while preserving customer choice. This agreement will be of significant benefit to both Sun and Microsoft customers. It will stimulate new products, delivering great new choices for customers who want to combine server products from multiple vendors and achieve seamless computing in a heterogeneous computing environment."

Steve Ballmer, chief executive officer, Microsoft, said, "Our companies will continue to compete hard, but this agreement creates a new basis for cooperation that will benefit the customers of both companies. This agreement recognizes that cutting edge R&D and intellectual property protection are the foundation for the growth and success of our industry. This is a positive step forward for both Sun and Microsoft, but the real winners are the customers and developers who rely on our products and innovations."

Elements of the Agreements:

Technical Collaboration:

Sun and Microsoft will each provide the other with access to aspects of their server-based technology and will enable them to use this information to develop new server software products that will work better together.

The first products they will focus on will be Windows Server and Windows Client. They will also include email and database software.

Sun and Microsoft engineers will cooperate to allow identity information to be easily shared between Microsoft Active Directory and the Sun JavaTM System Identity Server, resulting in less complex and more secure computing environments.

Microsoft Communications Protocol Program:

Sun has agreed to sign a license for the Windows desktop operating system communications protocols under Microsoft's Communications Protocol Program, established pursuant to Microsoft's consent decree and final judgment with the U.S. Department of Justice and 18 state attorneys general.

Microsoft Support for JavaTM:

The companies have agreed that Microsoft may continue to provide product support for the Microsoft Java Virtual Machine that customers have deployed in Microsoft's products.

Windows Certification for Sun Server:

Sun and Microsoft announced Windows certification for Sun's Xeon servers. In addition, the Windows certification process for Sun's Opteron-based servers is moving forward.

Future Collaboration for Java and .NET:

Sun and Microsoft have agreed that they will work together to improve technical collaboration between their .NET and JavaTM technologies.

Patents and Intellectual Property:

The parties have agreed to a broad covenant not to sue with respect to all past patent infringement claims they may have against each other. The agreement also provides for potential future extensions of this type of covenant. The two companies have also agreed to embark on negotiations for a patent cross-license agreement between them.

Legal Settlements:

The two companies are settling and terminating their lawsuit in the United States. Sun is also satisfied that the agreements announced today satisfy the objectives it was pursuing in the EU actions pending against Microsoft. [...read more...]

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