Larry Ellison and Scott McNealy, two of the biggest names -- and egos -- in technology, are going to kiss and make up Monday and then talk about the serious business of lowering the cost of computing.

At a joint news conference on Monday, the CEOs of Sun Microsystems ( SUNW) and Oracle ( ORCL) likely will roll out new, Intel ( INTC)-based servers to run Oracle database sources.

Although neither company would confirm the agenda, other than to say the topic is "low-cost computing," industry sources and a report by Information Week say the deal is on.

Industry insiders are betting that Sun, which has seen its server business crushed by cheap, Intel-powered boxes from the likes of Dell ( DELL), has little choice but to move downscale. And Oracle, suffering from slow license-revenue growth, is seeking new customers.

Although Sun needs Oracle much more than Oracle needs Sun, the move is right for both companies, said Jim Shepherd, a senior vice president of AMR research. "Right now, Sun is not leveraging business for Oracle," he said. "The message here -- run your Oracle software on a server built by someone who is reliable and experienced in the server market has appeal."

The companies have a long history of working together -- many businesses run Oracle databases on Sun servers, but Oracle's recent flirtation with Dell has derailed the partnership. So when the two CEOs get together at San Francisco's tony Museum of Modern Art on Monday, it's likely they'll announce a strategic partnership as well as the new products.

Sun is perceived as a latecomer to standards-based computing, offering only two x86-based servers (one powered by Intel and one by AMD chips). As U.S. companies have increasingly opted for cheaper models, Sun's server business has taken a painful hit.

In the first quarter, Sun was the only leading vendor to suffer a decline in global server shipments according to Gartner. The company's share of the market slipped to 4.9% from 6.3% last year, implying growth of negative 13.2%.

Within the lowest-priced segment of the server market, those costing less than $100,000, Sun also has lagged. Between 2001 and 2002, it grew unit shipments by a mere 6.3%, compared with a robust 25.1% for Hewlett-Packard ( HPQ), 19.2% for Dell, and 14.7% for IBM ( IBM), according to IDC.

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