Until recently, though, Intel was having trouble developing Xeon chips that matched the performance of AMD's Opteron processor. Since July, Intel has added two higher-performance and more power-efficient chips: the dual-core 5100, code-named Woodcrest, and the quad-core 5300, code-named Clovertown.

Stephen Josselyn, an analyst at research firm IDC, said Sun has been fighting the same battle against x86 hardware in the low-end server market that other Unix vendors with RISC-based processors have been.

A return to Intel chips should help Sun sell Solaris servers to a broader market and enable it to offer more options to data center managers who are turning to x86 technology, said Nathaniel Martinez, another IDC analyst.

Sun will continue to offer Opteron-based systems as well, and an AMD spokesman said Intel's backing of Solaris "is good for all of us." He added that everything he has heard about the Sun-Intel deal indicates that it will be complementary to Sun's existing business relationship with AMD.

Ben Ames and Robert McMillan of the IDG News Service contributed to this story.