Looking ahead
Sun and Microsoft made mention of some of the potential areas of future common work, including creating better interoperability between Microsoft's management products stemming from its Dynamic Systems Initiative and Sun's own data centre management software, called N1.
"DSI and N1 are sort of in the same stages of their lives," Papadopoulos said. "We have an opportunity to influence each other."
Papadopoulos, who has met several times with Microsoft chief software architect Bill Gates, said the two companies are doing more than simply supporting or directing the development of industry standards.
"I wouldn't be involved at this level, and Gates wouldn't be involved at this level, if we thought these were just standards activities. There is real tangible stuff that our customers have told us to solve," he said.
Going beyond supporting existing standards and working on product interoperability could set Sun and Microsoft apart in the eyes of customers. For example, in the area of systems management, standards allow two separate products to talk to each other, but they generally don't enable one vendor's product to administer a mixed network of gear from Sun, Microsoft and others.
"When you can manage through one common tool and set up group policies for Sun users from Microsoft Active Directory, then you don't have to cross-train managers on administration tools," said Kerry Gerontianos, president of Incremax Technologies, which develops custom Microsoft applications. "That higher level of interoperability means real savings."
On the software development front, the two companies have not committed to any closer interoperability between Microsoft's .Net development tools for Windows and Sun's Java line of tools and server software -- something company observers had originally expected. The only work thus far that relates to software development is a commitment to work together on Web services standards proposals, Papadopoulos said.
Indeed, both companies' respective development tools and middleware "stacks" are likely to continue to be their main point of competition. That infrastructure software is typically very expensive and critical to sales of add-on products and services. It's also vital in fending off industry heavyweights IBM, Oracle and SAP.
Though how they will collaborate is still not exactly clear, both companies do have a strategic interest in working together, analysts said.
With corporate customers demanding that products work better together and require less custom integration work, better interoperability of Sun and Microsoft gear could give the companies a leg up against common competitor IBM. Also, the operating systems business of both Microsoft and Sun compete with Linux providers, notably Red Hat.
From Sun's perspective, having a 10-year, $2bn partnership with Microsoft helps dispel concerns over the company's long-term viability, said Mark Stahlman, a financial analyst at Caris & Co. He noted that corporate customers prefer to work with full-service providers that can provide a full range of products, which the two companies can offer in combination.
"Everybody has gone through enough pain in the last few years; you would be foolish not to consider the possibility that you'll be out of business in five years. So establishing yourself as a long-term strategic partner for enterprise buyers makes you a survivor," Stahlman said.
Working with Sun, Microsoft could gain more credibility in selling into corporate data centres and breaking out of its roots as a desktop software provider, said Frank Gillett, analyst at Forrester Research.
But even as the two companies explore their areas of mutual interest, the full potential isn't yet clear. And with the high hopes attached to the historical Microsoft-Sun pact, it remains to be seen how far their relationship will go.
"I'm not convinced that Microsoft executives are fully bought into it," said Gillett. "But I think they are experimenting deeper than any of us would have thought."
