Sun Microsystems and Intel announced a broad alliance Monday that will lead to Sun's re-introduction of an Intel-based product line, the companies said.

Under the agreement, Sun and Intel will collaborate much more closely on products than they had in the past, said Sun Chief Executive Officer (CEO) Jonathan Schwartz during a press conference in San Francisco. "Intel has agreed to really promote Solaris. To help us collectively go out and build a marketplace and an ecosystem," he said. "Solaris will now be a tier 1 operating system, in the Intel definition."

Sun will build a line of Intel servers and workstations, the first of which will be a dual-processor Xeon system, expected by the end of June. Intel, for its part, is now considering Solaris a "top tier" operating system, and the company has already had engineers working on Solaris for the past few months. Eventually workstations and four-way Intel systems will also be added to Sun's portfolio, Schwartz said.

The engineering relationship means that Solaris will more quickly support new Intel processor technologies, and the two companies will work together to develop next-generation networking and virtualization technologies, as well as ways to speed up Solaris applications running on Intel machines.

"It means that we can collaborate on the feature-sets that buyers are focused on," said Intel president and CEO Paul Otellini.

Sun had abandoned Intel several years ago, launching a line of servers with chips from Advanced Micro Devices (AMD) in late 2003. Sun also makes its own line of Sparc and UltraSparc processors.

At the time, Sun hailed AMD's 64-bit Opteron chip, and planned to use it in two-and four-way servers. But now, a return to Intel chips will allow Sun to sell its Solaris OS to a wider market, and to offer a wider range of options to data centre administrators, who are increasingly replacing Unix machines that use RISC (reduced instruction set computing) processors with cheaper x86-based servers, according to Nathaniel Martinez, an analyst with IDC.

The news comes as a relief to Intel, which announced another disappointing quarter of sales on Jan. 16, reporting revenue that was 39 percent lower than last year. Intel has endured a tumultuous year, as Otellini has tried to recover profits by laying off 10,500 workers and selling several business divisions.

Intel has upgraded its entire line of processors in recent months, making up for an era when it was criticized for making chips that used more watts and created more heat than AMD's Opteron processor. Intel's power-efficient new server chips include the "Woodcrest" dual-core Xeon 5100 and "Clovertown" quad-core Xeon 5300.

Intel's rival AMD said it looked forward to continuing to supply Sun with server chips. "From an AMD standpoint, Intel backing Solaris would expand the market, expand the x86 ecosystem, which is good for all of us," said Phil Hughes, an AMD spokesman.

AMD also sells Opteron chips to Dell, Hewlett-Packard and IBM, but Sun has one of the biggest portfolios of server platforms on the market, he said.

"Everything we've been told is that this is complementary to the AMD-Sun relationship. Sun is still a valuable and strategic AMD partner, and we are continuing to collaborate with them on our silicon and system-level road maps, and they are continuing to optimize platforms for our next-generation processors."

AMD plans to release its first quad-core chip, the "Barcelona" version of Opteron, in mid-2007, and expects server vendors to quickly begin selling systems including the chip.