Date:04/04/2004 URL: http://www.thehindu.com/2004/04/04/stories/2004040400611500.htm

Business

Microsoft makes $1.6 b peace with Sun

WASHINGTON, APRIL 3. High-tech rivals Microsoft and Sun Microsystems have buried the hatchet, announcing Microsoft would pay $1.6 billion to settle antitrust and patent disputes.

The deal between the long-time bitter rivals yesterday came in conjunction with the announcement of a broad ten-year agreement on technical cooperation which could help lift Sun out of its recent slump.

The peace deal marks a major shift in the tech landscape as Sun, a major maker of software and servers, has been one of Microsoft's fiercest critics and a force in the antitrust actions against Bill Gates' firm.

Under the settlement, Microsoft will pay $700 million to resolve pending antitrust issues and $900 million to resolve patent issues. "Our customers said, `Stop the noise and start the collaboration,'" said Scott McNealy, Chairman and Chief Executive Officer, Sun, at a news conference in San Francisco with Microsoft CEO, Steve Ballmer.

"This is a good idea today, and it was a good idea 12 months ago," Mr. Ballmer said. "The fact is it presents a new opportunity to go out and work on things that are customer driven".

Separately, Microsoft will make an up-front royalty payment of $350 million in a deal allowing for use of each other's technology and Sun will make payments when this technology is incorporated into its server products, the companies said.

AFP