SANTA CLARA, Calif., - July 6, 2004 - Sun Microsystems, Inc. (Nasdaq: SUNW) today announced that it is expanding its customer financing capabilities, offered through Sun Microsystems Finance, to better serve federal government customers. Through a newly formed arrangement with Key Equipment Finance's government finance unit, Sun is positioned to provide simplified access to financial solutions for customers in this sector who wish to lease and finance Sun technologies and services. Since its inception as a global capability in 1999, Sun Microsystems Finance has offered Sun customers competitive, innovative financing for their total Sun solution, reducing cost and complexity and enabling customers to continually innovate throughout the entire IT lifecycle. The Key Equipment Finance program extends these offerings to better meet the unique needs of federal government information technology (IT) purchasers.

Through the partnership with Key Equipment Finance, customers in the federal government will be able to finance Sun solutions under the General Services Administration (GSA) schedule, allowing them to acquire Sun technology with a convenient monthly payment plan that requires no negotiation. The GSA schedule provides a wide range of purchasing options to address the various financial constraints that are common to federal government agencies. This multiple award schedule provides federal agencies with direct access to commercial providers, including Key Equipment Finance and Sun Microsystems Finance, that can thoroughly support the needs of the federal community. The agreement between Sun Microsystems Finance and Key Equipment Finance also serves municipal government entities that have approved GSA terms available to them.

This expanded capability from Sun Microsystems Finance is available in the U.S. through Sun sales and Sun authorized iForce(sm) partners. Gary Newgaard, president of Paragon Systems, an authorized iForce partner since 1992 specializing in government IT solutions, said, "Understanding and having the ability to meet the financing needs of the federal government is an important part of delivering a single point of access to total IT solutions. By adding the capability to support GSA business, Sun and its partners are in a better position to serve this vital customer base."

The national government is the largest employer in most countries. As such, national government entities are major purchasers and deployers of IT, and state and local government entities play similarly large roles in their jurisdictions. Currently, approximately one third of Sun customers in this sector are under a GSA schedule. "The Sun Microsystems Finance alliance with Key Equipment Finance offers customers in the federal and municipal government space access to financing plans tailored to their specific needs, especially concerning contract negotiations and payment schedules," said Kris Snow, vice president of Sun Microsystems Finance. "By partnering with Key Equipment Finance we further reduce the complexity of IT purchasing for our government customers and ultimately improve the value of their investment in Sun's end-to-end technology."

With this new partnership, Sun Microsystems Finance provides government customers with an expanded range of finance options that enable further cost and complexity reduction. This includes Fair Market Value leases, lease to ownership plans, and technology refresh options.

For more information about Sun Microsystems Finance, please visit http://www.sun.com/leasing.

About Key Equipment Finance

Key Equipment Finance is an affiliate of KeyCorp (NYSE: KEY) and provides business-to-business equipment financing solutions to businesses of many types and sizes. Headquartered outside Boulder, Colorado, Key Equipment Finance oversees a $9 billion equipment portfolio with annual originations of approximately $3.9 billion. The company has major management and operations bases in Toronto, Ontario; Albany, New York; London, England; and Sydney, Australia. The company, which operates in 24 countries and employs more than 600 people worldwide, has been in the equipment financing business for more than 30 years. Additional information regarding Key Equipment Finance, its products and services can be obtained online at KEFonline.com.

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

Sun, Sun Microsystems, the Sun Logo, iForce, and The Network Is The Computer are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries.