The America Online-Netscape-Sun Microsystems Inc deal is looking increasingly good for Sun. Not only does it effectively eliminate a lot of competitive software by the inevitable consolidation of many of the Sun and Netscape servers on Solaris, it also gives Sun an important foot in the door at the world’s most popular ISP. Under the terms of the deal Sun is guaranteed $500m in equipment sales over three years at list price, in exchange for the $350m it will pay AOL to license the Netscape software over the same period. From what we understand, ever since a major system failure in the early days at AOL in the 1980s, the Dulles, Virginia-based ISP has been almost exclusively a Tandem Computers shop at the sharp end of its operations. It remains to be seen exactly what Sun hardware AOL buys, but it’s a chance for Sun to impress what could prove to be an extremely valuable customer.
