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Sun Money Starts to Trickle Back in Microsoft Deal

A year after Microsoft paid nearly $2 billion to Sun Microsystems to settle legal claims and license technologies in a 10-year technical collaboration, some undisclosed amount of money is starting to flow the other way.

In response to a question during a joint news conference with Microsoft CEO Steve Ballmer last week, Sun CEO Scott McNealy said, "There is licensing going on both ways and certifications going on both ways, so, yes, it is a two-way street." Ballmer and McNealy were providing a one-year update of the deal that was originally unveiled in April 2004.

McNealy cited Sun's recent licensing of Microsoft's Remote Desktop Protocol (RDP) for server-based computing on Sun Ray thin-client systems as one specific technology Sun was paying Microsoft for.

Ballmer confirmed payments were going both ways, although he hinted that the Sun payments are fairly small. "All the things I think which are financially material to both companies to disclose have been disclosed," he said.

The agreement that Sun and Microsoft announced in April 2004 involved payments from Microsoft to Sun of $700 million to resolve pending antitrust issues, $900 million to resolve patent issues and $350 million in up-front royalties for use of Sun technologies.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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