In April 2004 Microsoft and Sun announced that they had reached a settlement in their ongoing legal disputes and also planned to collaborate with each other on a variety of technology issues. Under the terms of the unexpected and unprecedented settlement, Microsoft agreed to pay Sun nearly $2 billionó$700 million to settle the antitrust suit, $900 million to resolve patent issues, and an upfront royalty payment of $350 million for use of Sunís technologies. In return Sun agreed to drop its antitrust case and to make royalty payments to Microsoft when Microsoft technology is used in Sunís products. In a company statement Sun also said that the objectives it had pursued in the EU case against Microsoft had been satisfied by the April settlement.
Both Sun CEO Scott McNealy and Microsoft CEO Ballmer indicated that the settlement was driven in large part by customers who wanted the two companies to work together to solve technology issues. Most companies use a mixture of hardware and software systems, and interoperability is key for them, both men noted. The two companies agreed to work together to improve the compatibility of Microsoftís .Net platform and Sunís Java technologies.