Intel Inside the Sun

Intel (INTC) has nearly completed a complete clawback of server market supremacy with today’s announcement that Sun Microsystems (SUNW) will closely collaborate with Intel. After substantially improving their devices and surpassing the benchmarks set by AMD (AMD), Intel is back in the drivers seat when it comes to high margin server CPUs. This was an outcome I felt was never in doubt.

Low power multicore architectures are going mainstream in general computing applications and are no longer solely the exotic domain of server computing.

With Sun and Intel broadening their relationship, I expect Sun to move completely away from internally developed silicon. I outlined why this would take place over a year ago (see Sun wants to Change the Planet), and the arguments are more valid today given the progress and commitment Intel made towards multicore architectures.

Schwartz’s blog all but indicates this move is underway:

Perhaps the most interesting part of the relationship (at least for enterprises) is this: we’re pairing up to do some collaborative engineering around larger systems (where larger implies greater than 4 socket…). Optimized for Solaris and Java, of course, and leveraging one another’s virtualization and performance technologies.

This is exactly the application their in-house Niagara is targeted. Schwartz is essentially saying Sun will work with Intel to utilize their silicon in high end systems

Apple Computer (AAPL) moved their entire hardware base over to x86. Remember how hard Apple pushed the RISC architecture and it’s technical supremacy? It appears that Sun, the last real holdout in non-x86 computing, is poised to capitulate as well.

Full Disclosure: I own none of the stocks mentioned.