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Sun Deals for Handy Andy

Sun Microsystems Inc. (Nasdaq: SUNW) has rehired its first employee, Andreas "Andy" Bechtolsheim, and plans to buy a stealthy startup he's heading up (see Sun to Acquire Kealia).

The news furthers Sun's efforts to regain some of the luster it's lost in the downturn, in part by returning to its roots as a technology innovator.

During Sun's quarterly product launch yesterday, CEO Scott McNealy gleefully presented Bechtolsheim as the latest addition to the executive staff, while reminiscing about their long acquaintance. After meeting McNealy at Stanford, Bechtolsheim, a designer of single-board workstations, became employee number one at Sun, which was founded in 1982. He was VP of technology there through 1995, when he left to found Granite Systems, which was sold to Cisco Systems Inc. (Nasdaq: CSCO) and became part of that company's gigabit switching unit.

For the last several months, Bechtolsheim's been heading up Kealia Inc., which Sun will buy in a "stock-for-stock merger," terms undisclosed, by the end of next quarter (see Sun to Acquire Kealia). Kealia's employee count includes 58 engineers, Bechtolsheim says. A spokeswoman for Sun says there are no immediate plans to move these employees out of their current digs in Kealia's Palo Alto, Calif., office into the Sun campus.

Kealia's been working on high-performance servers, thought to be aimed at the digital video market. Its existence, and Bechtolsheim's involvement in it, was first reported by our sister publication Light Reading back in October 2003 (see Is Cisco Tuning Into Video? and Kealia Project Raises Questions). Since Bechtolsheim was employed by Cisco at the time, it seemed possible that company could have been involved.

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