Longtime rivals and occasional collaborators Sun Microsystems and Microsoft have announced that Sun will ship 64-bit servers with Microsoft's Windows Server 2003 operating system.

Within 90 days, Sun will offer Windows Server 2003 on its entire line of Sun x64 systems. Sun already certifies that Windows Servers will run on its hardware, but this agreement will allow Sun to preinstall the software and offer support to customers.

The two companies also committed to expanding their technical collaboration--first announced in 2004 but one which had not lived up to the initial hoopla--into virtualization.

In particular, the two companies said they will ensure that Solaris will work well as a "guest" with Microsoft's virtualization technology and Windows will work well in a virtualized Solaris environment.

The move is a major strategic shift for Sun which has a history of boasting of its decision in the 1990s to shun Windows in favor of Unix and has derided other hardware makers for aiding Microsoft by distributing its operating system.

"It's completely natural for us to have a business relationship around the operating system we're virtualizing. So the timing felt right for that," Fowler said. He also implied that Windows Server has matured to the point to satisfy the high-end demands of customers that run Sun hardware.

As part of the arrangement, the two companies will roughly double the size of an interoperability lab first set up in 2004 to take on the work on virtualization. Executives declined to number how many people will work there except to say that the lab houses both Sun and Microsoft employees.

Other areas of collaboration include ensuring that Sun's storage systems work well with Windows and joint work on Internet Protocol TV.

Fowler declined to say whether the OEM agreement will extend when Microsoft ships Windows Server 2008 next year.

During the call, Fowler and Andrew Lees, corporate vice president of Microsoft's Server & Tools Marketing and Solutions group, said the partnership between the two companies has been continuing with little notice from the media.

Specifically, the two firms' collaboration on interoperability has yielded better-working products in the areas of systems management, application development, storage, and directories.

For Sun, the Windows distribution agreement is another move in its efforts to expand its business--once built primarily around proprietary hardware--by partnering.

Last month, IBM said that it will ship Solaris on its servers