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AT&T picks Sun to serve up video

AT&T will use Sun Microsystems' next-generation servers to power its video-on-demand services.

Editor's note: The original version of this blog incorrectly stated that AT&T is using the Sun Streaming System. The text has since been corrected.

Sun Microsystems said Wednesday that AT&T plans to use its Sun Fire servers and storage arrays to power its Internet Protocol television service, called U-Verse.

The deal is significant for Sun because it could be a foot in the door to eventually sell AT&T its new, advanced Sun Streaming System, which includes Sun Fire servers and other technology that can be used to stream 160,000 simultaneous IP video streams onto a network.

Sun created the Sun Streaming System to serve the emerging IPTV market. Phone companies around the world, such as AT&T, are using IP to deliver television service. And the Sun Streaming System, which can cost as much as $8 million, provides a scalable and cost-effective way to deliver video-on-demand services to thousands of homes. A deal with AT&T, the largest phone company in the United States, would be a huge validation of the technology.

It would also be a big endorsement for Andy Bechtolsheim, the Sun co-founder who led the design of this new server technology. Bechtolsheim rejoined Sun in 2004 when it acquired his start-up, Kealia, which was basing its business on the Internet-video product.

But so far, Sun is keeping mum about whether or not AT&T is testing the new system.

"Sun can't comment on whether or not AT&T is currently evaluating the Sun Streaming System," a spokeswoman said. "But this deployment definitely provides a great opportunity for working with them in the future.