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Microsoft and Sun settled their legal disputes by Microsoft handing over $1.6 B to Sun. With MS sitting on top of $52 B in cash, the settlement shouldn't hurt Microsoft too much. Sun has only $2 B in cash, so that'll help them for a bit as they continue to bleed cash. In addition, MS forked over $350 M to license Sun technologies. But that'll probably be given back to MS when Sun licenses MS technologies.

Here's my take on the settlement. Both of them are teaming up because of the Linux/Open Source revolution. It has been eating away at Sun and threatens it's viability. And it's a looming threat to Microsoft. So, they want to fight against it by joining forces. Also, Microsoft's lawyers are probably getting stretched thin with cases in US, Europe and Asia.

It would be very interesting if Sun would be able to release an OS that is compatible with both Unix and Windows. But, it'd be years away before that can be realized. And I wonder if Sun can last that long. In the meantime, Linux continues to gain momentum. It already has a firm grip on the server market. And it is trying to break into the end-user market, but it'll probably be years before that can happen, if at all.

One thing I see in all this is that Linux and Open Source will only continue to grow. Both Sun and Microsoft see this. And they were even willing to stop punching each other and start holding hands because of this threat.

Links:
Microsoft and Sun Microsystems Enter Broad Cooperation Agreement; Settle Outstanding Litigation
John Fowler, VP and CTO, Software elaborates on the landmark agreement between Sun and Microsoft.
Commentary: Where is Java in the settlement?
Two Takes on the Java Dilemma
The Sun/Microsoft settlement - James Gosling
Sun settles with Microsoft, announces layoffs
The Sun - Microsoft Settlement
Ballmer Outlines Sun Agreement Terms for Microsoft Employees
Sun-Microsoft Accord a Boon for Enterprises

Posted: 2004-04-14 15:03:14


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