Sun Makes Peace with Microsoft, Restructures

By Clint Boulton

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Under the truce terms, Sun ended patent and antitrust suits against the Redmond, Wash., software giant. The companies also agreed to share technology.

The pact will mean a cash windfall for Sun. Microsoft will pay Sun $700 million for antitrust issues, $900 million for patent issues and $350 million for up-front royalties in the technology deal. The payments will come in the fourth quarter and will pad Sun's significant reserves.

As for other issues, Sun Chairman and CEO Scott McNealy said Sun will certify its servers to run on Solaris, Linux and now Microsoft's Windows operating systems. He also said Sun would not abandon its desktop strategy.

"We think this improves our desktop efforts by making us more interoperable," McNealy said in an early morning conference call with financial analysts.

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