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Why Sun invited Intel to the party

CNET News.com's Michael Kanellos says the company went with Intel out of pragmatism, not ideology.

I've been racking my brain, but I still can't find a conspiracy at the heart of the Sun-Intel alliance.

In case you missed it, Sun Microsystems agreed to put Intel processors into some of its servers, while Intel will help promote Sun's version of Solaris for servers running x86 chips. Sun has previously used Intel chips, but it phased them out.

When a big story strikes, it's our job in the reporting ranks to flesh out some sort of all-encompassing strategy--especially when two large, often antagonistic companies suddenly join hands and frolic to "So long, farewell, auf Wiedersehen, goodbye" in front of their investors and competitors.

Does Sun need Intel to alleviate supply concerns with Advanced Micro Devices or give it credibility with overseas banking clients? Is the real story here IBM? Does it open the door to into the home and IPTV? Haven't the two companies shared a long, antagonistic history?

And what on Earth are NetBeans?

In a way, playing the board game Risk as a kid prepared me for writing those kinds of stories. A single move on the board can upend a swarm of alliances and strategies. But the problem with conspiracy theories is the same problem with Risk. There are always a few factors that get a disproportionate amount of influence. Think about it: the goal in Risk is to take over the world. So how come the best way to win is to control New Guinea and Peru?

The reality of the Sun-Intel alliance is fairly simple.

The reality of the Sun-Intel alliance is fairly simple. Between 2003 and a good portion of 2006, AMD had a better server chip. Corporate customers wanted it, so Sun adopted it. Last year, Intel upped AMD with Woodcrest. It can now offer pretty good chip pricing and supplies because it got to 65-nanometer manufacturing a year ahead of AMD, and it has more factories.

Corporate customers have been adopting Sun's version of Solaris for x86 servers, so Intel will help promote it to see if it can help displace more of those lingering RISC-Unix boxes.

Performance, price and volume--that's pretty much the story.

While that sounds dull on the surface, it's actually a somewhat significant milestone. Sun is bringing Intel chips back into its fold because of convenience. That's a sign that the microprocessor market has matured. Server makers can choose AMD or Intel. AMD isn't fading away or stumbling drastically, something that has occurred in the past.

Then again, AMD has to deliver on performance, and that could be problematic as time goes on. AMD is a much smaller company than Intel and has many fewer engineers. Most of the time, more is better. Thus, AMD may find the gains it has made over the past three years receding slightly with each generation of chips.

More doesn't always equal better. AMD's credibility with corporate buyers began because it came out with a better chip, Opteron, while Intel continued to fumble with the Pentium 4. But you can't really count on that happening again soon: it was an unusual combination of circumstances that may not occur again. Of course, Intel likely will continue to experience erosion in chip prices.

The newfound dullness at Sun, meanwhile, is significant as well. In years past, Sun events weren't complete without a) a cartload of unintelligible code names and 2) lots of bombast. Sun would declare that it's superior to everyone else, that its competitors were engaged in a plot to take over the world, and that if you didn't understand it, you had the mental capacity of a gibbon.

The high point for that type of announcement came two years ago when then-CEO Scott McNealy talked about the battle of "humankind versus IBM Global Services, and we are kind of the leader of mankind in this aspect." IBM Global Services? It just seemed like such a B-league evil. If Spider-Man had to face it, he'd probably outsource.

By contrast, Sun's current CEO, Jonathan Schwartz, said he simply went out to dinner with his counterpart at Intel, Paul Otellini, and they hashed out their differences.