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Rivals Sun Microsystems (Nasdaq: JAVA) and HP (NYSE: HPQ) have inked a new multiyear agreement that enables HP to sell and support Sun's Solaris operating system on HP ProLiant server and blade system computers.
The new deal's 
intent is to increase demand for Solaris on both HP ProLiant servers and server blades in new markets.
It is also designed to make the buying process easier on customers by providing a single point of purchase for Solaris on HP ProLiant servers.
As part of the deal, the two companies have agreed to collaborate on integrating Solaris and HP Insight software in ProLiant servers in order to reduce operational costs.
HP's stock was up .3 percent to US$30.20 per share in mid-day trading on Thursday. Sun's stock was down 1.23 percent to $4.80 per share.
Sun Needed to Make a Move
In essence, the agreement gives HP yet another operating system to offer to customers, while Sun gains wider distribution of its software.
"I think Sun has to do something to energize its business and get itself on a better course," said Andrew Reichman, an analyst at Forrester Research. "Sun has a lot of good bits and pieces of products -- lots of good software -- but they have done a poor job of promoting their products."
Without making a move like this, Sun risks fading into obscurity and irrelevance, he told the E-Commerce Times.
The agreement could be chancy for HP, however.
"HP runs the risk of raising questions as to why they need to go to market with Sun's version of Unix," Reichman said. "Is HP giving up on its own version of Unix, HP UX, or is there a fundamental flaw in HP UX that makes it so it can't go to market without its rival's help?"
On the Other Hand
"The flip side is that HP is a volume machine," Reichman noted. "It does a great job of getting volume-priced X86 servers out into the market. I could see HP making the argument that the more ways it can get people to use its products in higher volumes, the better."
As it stands now, IBM (NYSE: IBM) is still the leader in overall share of the server market, according to IDC.
As of the fourth quarter of 2008, IBM had 36.3 percent of the market. HP was second with 29 percent of the market, Dell (Nasdaq: DELL) was third with 10 percent of the market, and Sun was fourth with 9.3 percent of the market, IDC statistics show.
Could the agreement between HP and Sun be a calculated attack on Big Blue?
"I think the end result could be that Sun and HP take some market share away from IBM," Reichman said, "but I don't think this is an offensive move against IBM."
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