When Medavie started running Web applications in 2000, Sun's UltraSparc-based systems dominated that market, and software vendors were desigining applications specifically for Sun's Solaris operating system, said Don McPhee, director of technical services at the Moncton, New Brunswick-based insurer.

But he added that as lower-cost x86 servers have become increasingly capable, Medavie has been moving to "more commodity-based" systems running Linux and using proc'essors from either Intel Corp. or Advanced Micro Devices Inc. "Things have changed," McPhee said. "We just went with the momentum."

Now Sun is changing. Two years after the company dropped several low-end servers based on Intel chips and decided to rely solely on AMD for x86 devices, Sun said it will develop a full of line of servers and workstations with Intel's Xeon processors. Sun plans to start shipping Intel-based systems by June, and the two vendors will work together to optimize Solaris for hardware built around Intel's x86 chips.

Sun CEO Jonathan Schwartz said during a teleconference that about 70% of Solaris x86 users are running the operating system on Intel-based hardware. But Sun expects the new combination of Xeon and its OpenSolaris open-source software to attract more interest from independent software vendors.

In addition, Sun officials acknowledged that UltraSparc-based systems have become too expensive for many users looking to run Web applications. "The customers who left us post-bubble didn't want to leave us," said Scott McNealy, Sun's chairman. But, he added, customers no longer could afford the cost of the company's systems when "the Xeon thread was so much cheaper."