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Sun Microsystems and EDS Extend Strategic Partnership

Companies enter exclusive negotiations to renew managed services agreement; jointly deliver utility computing services

PLANO, TEXAS, AND SANTA CLARA, CALIF.
February 2, 2005

Sun Microsystems and EDS today announced they are in exclusive negotiations on an eight-year services agreement, whereby EDS will transform the operations of Sun’s data centers to the EDS Agile Enterprise Platform, its next-generation global delivery system. Financial details of the proposed transaction were not disclosed.

In addition, the two companies have agreed to jointly deliver IT services, including utility computing services based on Sun’s Solaris 10 OS, to some of the world’s largest enterprise customers.

“Customers are telling me everyday that they are experiencing tangible, bottom-line business benefits from the strong partnership between Sun and EDS,” said Scott McNealy, chairman and chief executive officer, Sun Microsystems, Inc. “The combination of EDS’ services, plus Sun’s solutions is powerful. We share the same vision for the future – to deliver highly reliable IT solutions to customers more efficiently. Today that strong relationship is advancing forward by leveraging each other’s strengths for our collective customers worldwide. It proves the old adage that two heads are better than one.”

“An extension of the data center contract with Sun further validates the strong partnership between EDS and Sun,” said Michael Jordan, chairman and chief executive officer, EDS. “The combination of Sun’s world-class technology with EDS’ world-class IT services not only benefits our two companies, but also extends this value to our mutual clients. We look forward to elevating that relationship individually and as we work collaboratively with other EDS Agility Alliance partners.”

Sun is a founding member of the EDS Agility Alliance, a federation of market-leading technology companies collaborating to innovate, develop and deliver the EDS Agile Enterprise Platform. Sun is also EDS’ preferred partner for enterprise-wide network computing, outsourcing environments and utility-based computing for the EDS Agile Enterprise Platform. EDS has been providing data center services to Sun since 2000, and the two companies have been strategic partners since 1997.

Sun Influences EDS’ Agile Enterprise Platform

EDS’ Agile Enterprise Platform will provide flexible IT systems that empower enterprises to manage change through agile processes, applications and technology architectures. Sun’s SolarisTM 10 OS provides the operating system base demanded by this technology architecture. Solaris 10 OS also includes features from predictive self-healing to secure grid containers that reduce costs and reduce complexity.

Because Solaris 10 OS runs on Sun’s high-performance servers using the company’s SPARC® processors, or on industry-standard servers based on x86 processors like the AMD Opteron, EDS and Sun will be able to provide services to customers within a wide variety of budgets.

Greater Efficiencies for Sun from Outsourcing

One of the cornerstones of the partnership is EDS’ management of many Sun back-office IT functions. Using the same technology and approach the two companies will offer their mutual customers, EDS will operate Sun’s data centers and data center systems, and provide other technical services related to business systems and Internet operations.

In addition to Sun’s EDS-managed data centers in Europe, Asia and the U.S., the companies will jointly develop and test enterprise offerings in Sun’s iForce partner center in Menlo Park, Calif., and EDS’ Agility Alliance Development Center in Plano, Texas.

“At Sun, we not only talk about the value of delivering IT resources as a service, but we consider it vital to how we run our business,” said Bill Vass, chief information officer, Sun Microsystems Inc. “By moving Sun back-office functions such as IT Help Desk/first tier support to EDS’ front office, Sun can better focus its resources on the innovation that is the core of our company.”

About EDS

EDS provides a broad portfolio of business and technology solutions to help its clients worldwide improve their business performance. EDS’ core portfolio comprises information-technology, applications and business process services, as well as information-technology transformation services. EDS’ A.T. Kearney subsidiary is one of the world’s leading high-value management consultancies. With more than $20 billion in annual revenue, EDS is ranked 87th on the Fortune 500. The company’s stock is traded on the New York (NYSE: EDS) and London stock exchanges. Learn more at eds.com.

The EDS Agility Alliance

A federation of market-leading infrastructure, application, BPO and industry providers collaborating to innovate, develop and deliver the EDS Agile Enterprise Platform – EDS’ next generation global delivery system. Current EDS Agility Alliance partners include Cisco, Dell, EMC, Microsoft, Oracle, SAP, Siebel, Sun Microsystems and Xerox.

About Sun Microsystems, Inc.

Since its inception in 1982, a singular vision — “The Network Is The Computer” — has propelled Sun Microsystems, Inc. (Nasdaq: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://sun.com


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