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'New' CEOs and a new Sun-Intel partnership

Personalities of new CEOS, not just technology, figured in Intel's return to Sun Microsystems' server line.

SAN FRANCISCO--As with many couples in the early stages of courtship, some nice wine helped warm the mood between Sun Microsystems and Intel.

Specifically, a bottle of Barolo at the swanky Delfina restaurant in San Francisco, where Sun Chief Executive Jonathan Schwartz met Intel CEO Paul Otellini.

"A really good bottle," Otellini recounted here Monday as the companies announced a new partnership to build Xeon-powered Sun servers and cooperate in software development. Sun previously had relied solely on Advanced Micro Devices' processors in its attempt to claim a place in the x86 server market it once shunned.

"Scott did move past his hang-ups, but it's still hard to erase history.'
--Gordon Haff
Illuminata analyst

It was Schwartz who asked his opposite number on the first date. When he took over from Scott McNealy as Sun's CEO last April, the call to Otellini was the first Schwartz made, he said. "Surely there's more we can do together," he pitched the chipmaker chief, who had taken over the Intel reins from Craig Barrett less than a year earlier himself.

Intel's restored competitiveness was a major part of the reason Sun let Intel back into its servers. But the companies' new executives played no small role, helping the companies move beyond a relationship that had been fractious at best.

"With Jonathan coming in, we moved past some of the public jousting. And with Paul coming in after Craig, it really was a new day," said Pat Gelsinger, general manager of Intel's Digital Enterprise Group. "We had new leadership at the two companies. Things started coming together nicely over the last year and a half."

Sun for years disparaged Intel processors, preferring the "all the wood behind one arrowhead" strategy that paired its own Solaris operating system with its own 64-bit Sparc processors. When Sun did enter the x86 fray in 2002, McNealy first dismissed Intel servers as generic boxes to be bought from no-name Taiwanese suppliers, and when it got x86 religion for real, company executives took pains to tout AMD's technology.

Intel had its moments of unkindness too.

In August, after a months-long collapse of plans for Sun to bring Solaris to Intel's Itanium processor family, Barrett said Sun's philosophy was as flawed and outmoded as Communism.

And in March 2006, at the Intel Developer Forum, Intel didn't just tout the performance of its new Xeon 5100 "Woodcrest" chips--the ones that turned around the chipmaker's competitive fortunes for servers in late 2006. Instead, it put the spotlight on a speed test featuring an Intel-based Hewlett-Packard server trouncing a Sun X4200 server.

Water under the bridge
What a difference a year makes. At , John Fowler, Sun's executive vice president of servers, will share the stage with Intel.

Schwartz has been instrumental in transforming Sun into a more neutral company. In 2004, when he was promoted to chief operating officer and McNealy's No. 2 man, Sun buried the antitrust suit hatchet with Microsoft. He was willing to work with Linux, too. He even floated the idea of running Solaris on Intel Itanium and IBM Power processors--the latter idea now a reality by virtue of OpenSolaris' portability.

And most relevant to Monday's news, he was an advocate of x86 servers, not just Sun selling its own, but also Sun offering Solaris as a free download that could be installed on machines from IBM, HP and Dell.

Most of that transformation began under McNealy's watch, but Schwartz came with less baggage.

"Scott did move past his hang-ups, but it's still hard to erase history," said Illuminata analyst Gordon Haff.

Gelsinger said it took some time before he was convinced Sun was serious about x86 servers.

"They were in and out of the IA (Intel architecture) business. It was not clear in the early part of this decade if they were really in," Gelsinger said. "Even with early announcements, with Fowler saying, 'We're serious,' we weren't really sure." Intel was convinced by a series of moves--open-source Solaris, server road maps spanning multiple technology generations, growth in the market, and finally, the new management.

Fowler takes pains to point out that Intel faced competition for AMD business at Sun, and Gelsinger didn't deny it. "I didn't feel AMD had that system-level competence, but a partnership with a company like Sun that had that competence was really concerning to me," Gelsinger said.

Now that the company executives have embraced each other, figuratively speaking at least, it's time for lower-level employees to deliver what their superiors have promised. There, too, Gelsinger forecast strong ties.

"Our engineers are excited about anybody who wants to do cool technology with them," Gelsinger said. "The system technology of Sun, plus the ability to consummate it with the software layers, is highly motivating to our teams. I expect this to be a fabulous engineering relationship."