Intel and Sun Microsystems have unveiled a partnership in which Sun will build servers based on Intel's Xeon processor by June. The pair will also collaborate on Sun's Solaris operating system.

Although Solaris is currently certified for Intel processors, the chip giant will dedicate developers to help Sun fine-tune the software for advanced features on its processors such as hardware support for virtualisation, storage and I/O.

Intel makes its chip features available to developers as open standards, but Intel's help is expected to allow Sun to better support the features in its software.

"Solaris is evolving as a mainstream operating system, and is also mainstream in the equipment on which it ships," Intel chief executive Paul Otellini said at a press conference.

"We now have the opportunity to have Intel inside many of those boxes. [Solaris] is becoming the mission critical Unix for Xeon."

Otellini expects the partnership to help Intel gain traction in the financial and telecoms markets where Sun has traditional strongholds, but where Intel is relatively weak.

AMD has been Sun's exclusive supplier of x86 processors for the past two years since Sun abandoned its ailing Intel server business.

The decision to let Intel back in was driven by customer demand for a more diverse product line, according to Sun chief executive Jonathan Schwartz.

"We cannot be just about our own intellectual property," he said, claiming that 70 per cent of Solaris 10 installations run on Intel-powered servers, while customers use its hardware to run Windows, Linux or Solaris.

"There is only one person in the world who buys only from Sun, and that's our chief information officer. We don't expect you to follow him," added Schwartz.

• A video report of the Intel/Sun partnership is available on the Silicon Valley Sleuth blog