SAN FRANCISCO -- Tech titans
are betting that they stand a better chance of boosting sales as partners rather than rivals.
The companies announced on Thursday that Sun's Solaris operating system will be immediately available to run applications on IBM's low-end servers. Sun's Chief Executive Jonathan Schwartz billed the deal as a "tectonic shift in the market landscape" that will introduce products from each company to a broader range of clients.
Users of IBM servers will now be able to choose Solaris as their operating system over IBM's homegrown product, called AIX. The deal follows similar moves IBM has made to open its servers up to an array of popular operating systems, including
( NOVL) Unix operating system.
"Solaris is a wonderful addition to what we already have," said Bill Zeitler, a senior vice president and group executive in IBM hardware's division, during the conference. "This shows our commitment to offer clients a choice."
The deal could potentially make IBM's servers more valuable to customers by letting them run more applications and handle more data with the IBM gear they already have, or which they plan to purchase.
Within the past two years, Sun has granted roughly 10 million Solaris licenses, according to CEO Schwartz. This opens up a "huge untapped field that IBM can now exploit," said Bob Djurdjevic of Annex Research.
The deal would become more valuable to IBM if the companies move forward with their plans in progress to make Solaris available on high-end IBM servers and mainframes.
Shares of IBM closed the day down $1.54, or 1.4%, to $109.69.
For its part, Sun stands to benefit by opening a new path to introduce its Solaris operating system to the world of companies using IBM servers, which compete with Sun's own hardware.
The deal underscores the pragmatism of Schwartz, who took the helm in 2006 and aims to spark revenue growth by appealing to a broader set of customers.
One of Schwartz's first moves as CEO was a decision to use microprocessors from long-time rival
in certain Sun servers.
Thursday's move takes the concept a step further by making Sun's flagship operating system available to a broader swath of customers beyond those using Sun machines.
"We want to make sure we're open to as much market opportunity as possible," said Schwartz during the conference call.
Sun shares rose 7 cents, or 1.5%, to $4.72.
Senior writer Alexei Oreskovic contributed to this story.