Sun, Google Snuggle Up

Distribution, promotion deal just the start of duo's partnership.

The true value of the new alliance between Sun Microsystems Inc. and Google Inc. lies not in the fairly innocuous mutual distribution deal the two companies announced here last week but rather in the myriad possibilities now open to them, officials and industry observers say.

Under the agreement, the two companies will promote and enhance Sun technologies such as the desktop productivity suite and JRE (Java Runtime Environment). In return, Sun will include Google Toolbar as an option in its consumer downloads of the JRE.

But this arrangement likely is just the start of a far greater and more lucrative partnership that will focus on software services as a way for the two companies to compete with mutual rival Microsoft Corp. on the desktop. Those services are likely to involve using as a Web-based productivity suite.

Although Microsoft is a target for both companies, Sun officials are playing down that angle. "Were going after revenue, growth, customers, profits and the community," said Sun CEO Scott McNealy. "Thats all I have to say about that."

McNealy, however, did acknowledge that Suns partnership with Microsoft remains very important, as it is critical to customers that the two companies work together on Web services interoperability.

Future deals between Google, based here, and Sun, of Santa Clara, Calif., are expected to involve hardware and services components, with Google likely buying Suns recently launched Galaxy x86 servers. Google may also use Sun servers as the backbone of its wireless offering, known as Google Wi-Fi, analysts and investors said.

John Loiacono, Suns executive vice president for software, said the two companies are already talking about future deals. "We are both interested in pushing the concept of software as a service and giving customers information access as a service rather than under a licensed, CPU-type model. All things are on the table," Loiacono said.

Possible next steps could range from cooperation on engineering to active participation by Google in the Java Community Process and help in driving JCP 270, the next-generation Java definition, "as well as other areas that we are evaluating with no commitment," Loiacono said.

Google CEO Eric Schmidt underscored this commitment to Java. "We at Google do Java all over the place, so this initial deal is a natural extension and endorsement of that, and we will work with Sun to make that continue to happen," Schmidt said.

Possible future collaboration projects under discussion include work on OpenOffice. org, as well as marketing, R&D and cooperative arrangements in which each company will point its customers to the others technology. "This is just Phase 1 of a multiphase approach," Loiacono said.

Schmidt, however, was more cautious, saying only that while many future areas of collaboration make sense to him, he first wants to see how Googles customers react to this initial deal. As for Googles agreement to promote and enhance, Schmidt declined to give specifics.

Asked about possible collaboration between the two companies on Suns Solaris and OpenSolaris operating systems, Loiacono said Sun has disclosed all its existing and future planned technologies to Googles technologists so they can see what is useful and what Google may be able to help with.

Schmidt would say only that Google engineers contribute to the open-source community and open-source projects, of which OpenSolaris is one. Asked whether Google is working on its own operating system, about which there has been much speculation, Schmidt would say only that Google is in the end-user search business.

Jean Bozman, an analyst for research company IDC, in Framingham, Mass., said she expects further announcements between the companies on the hardware side. "I think you can expect there to be quite some movement in this regard," Bozman said.

Schmidt said Google has been a Sun customer for some time and Google is the defining application for some of Suns platforms. "That will be expanded significantly going forward," he said.

Suns McNealy said Google will also be key to "all of the free and open technologies we are driving. There will be a lot of money flowing both ways."