Google and Sun partnership announcement--sign of the apocalypse or effective sleep aid?

On Tuesday, Sun and Google announced a multiyear partnership and distribution deal. It looks like the actual news fell short of the market speculation which had built up significantly prior to the event. Maybe we're not reading enough between the lines, but it appears the two companies merely announced that they would collaborate on work on Sun's OpenOffice.org, Java, and OpenSolaris, and Google's Toolbar.

Much of the pre-announcement hype was fueled by this blog entry written by Sun President Jonathan Schwartz last Sunday. Schwartz hinted that the world and the way we buy and use software was about to change. I do think Google and Sun would like that to be the case sooner than later, but this deal does appear not get us there immediately.

What impact will this have on Microsoft? The market is reacting with mixed outlooks--from minimal (yawns) to extreme (the end of Microsoft is here). The answer probably lies somewhere in between, with an unquestionable threat to Microsoft if the two companies truly partner to go after the software king.

It could be argued that is the first time Microsoft is seeing Google as a real competitor and, with this deal, Google has something that will, to some extent, truly compete with Microsoft Office.

Microsoft is not officially commenting on the news, but I think it is certain that they are keeping a close eye on Google.