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Microsoft, Sun take stakes in telecom start-up

The rivals each invest $25 million in BroadBand Office, which provides telecommunications and technology services to commercial offices.

Rivals Microsoft and Sun Microsystems have each invested $25 million in BroadBand Office, a start-up that provides telecommunications and technology services to commercial offices.

Under the agreement, Microsoft and Sun will provide software products to BroadBand, which will use the technology to offer messaging, e-commerce, application hosting, network management and media services to its clients.

Sun and Microsoft have been bitter enemies for years. The companies clashed over Java, Sun's programming technology, when Sun filed a suit against Microsoft alleging that the software company had violated terms of its Java license.

Now, both Microsoft and Sun have for the first time invested in the same start-up. The companies see the investments in BroadBand as a way to increase the use of their software and as an entree to the market for hosted business software among small and midsize businesses.

Sun will provide its iPlanet, StarOffice and Java software to BroadBand, as well as its server and storage hardware. Microsoft will provide its Windows operating system and related technologies.

Launched last July, BroadBand is backed by venture capital firm Kleiner Perkins Caufield & Byers and some of the nation's largest real estate companies.

BroadBand said it will spend more than $100 million this year to wire office buildings with fiber-optic cabling to provide telephone service, high-speed Internet access and business software.