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To: Peter V who wrote (26739)	12/16/1997 1:45:00 PM
From: BillyG	Respond to of 50808

More on Intel/Sun........ biz.yahoo.com Tuesday December 16, 1:22 pm Eastern Time Sun , Intel strike deal on new Merced chip PALO ALTO, Calif., Dec 16 (Reuters) - Sun Microsystems Inc and Intel Corp (Nasdaq:INTC - news) on Tuesday reached an agreement under which the two rivals will collaborate on enabling Sun software to work on Intel's next-generation microprocessor. The deal will enable Sun to fine-tune its version of the Solaris operating system to run on Intel's Merced chip, due out in 1999, allowing Intel to boast even broader support for its new chip architecture for use on high-end computers. In addition, the two companies announced a broad, royalty-free cross-licensing pact covering microprocessors, systems and software technologies. In a statement, Sun said its 64-bit version of Solaris would be developed in time for Merced's release in 1999. The 64-bit chip is part of an industry drive to make software and hardware that can handle larger chunks of data. Solaris is Sun's version of the popular Unix operating system for computer networks. The alliance will enable Sun Microsystems' SunSoft unit to sharpen its efforts to fend off the onslaught of Microsoft Corp's (Nasdaq:MSFT - news) Windows NT operating system into the Unix market. Microsoft is pushing Windows NT as a Unix substitute. The deal gives engineers greater ''design freedom'' to develop chips without clashing over licensing. *** Janet's quote of the day: *** ''Clearly for us we're trying to get anybody or everybody tied into Merced if we can,'' an Intel spokesman said, noting that Sun was viewed as one of the last major computer systems vendors not to have endorsed Intel's Merced. Sun's endorsement could prove somewhat awkward because its archrival, Hewlett-Packard Co (NYSE:HWP - news), partnered with Intel to help jointly design the new chip. And some analysts said the deal could backfire. ''It's hard to see what's in it for Sun,'' said Andrew Allison, publisher of newsletter Inside the New Computer. ''It's clearly a win for Intel. It enables them to say they have every major operating system in the world on Merced.'' Allison predicts that Sun, which is the dominant force in the market for Unix workstations used by engineers, is about a year behind the rest of the industry in suffering erosion of customers shifting to Windows NT systems from Unix. For example, the rest of the Unix industry lost five to 10 percent of their unit volume in Unix workstations last year and 10-15 percent in 1997, Allison projects, while Sun may lose 5-10 percent in units this year and 15-20 percent in 1998. In this market, Santa Cruz Operation Inc. (Nasdaq:SCOC - news) is by far the market leader for supplying Unix for workstations and is expected to remain so. Compaq Computer Corp. (NYSE:CPQ - news) and other vendors have made major commitments to Santa Cruz.