Sun Microsystems' mishandling of Solaris on the Intel platform left an opening for Linux to become established, when the company's Solaris OS could have won out instead, Sun co-founder and former CEO Scott McNealy said when interviewed Thursday evening by former Sun President Ed Zander at a Silicon Valley business and technology forum.

Sun was acquired by Oracle early in 2010 after facing heavy losses amidst a poor economy and industry-wide trends toward Intel and Linux systems, which were not Sun specialties. But things could have worked out differently, according to McNealy.

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Sun had its Solaris x86 product, which the company kept reviving and canceling. "If we had just grabbed the Intel Pentium chip and done a one-way and two-way pizza box with Solaris on it, Linux never would have happened," McNealy said. "Google today would be running on Solaris." Oracle is still offering and developing Solaris.

McNealy and Zander also recalled how close Sun came to acquiring Apple Computer in late 1995 and early 1996. "We were literally hours away from buying Apple for about $5, $6 a share at that time," Zander said. But an investment banker on the Apple side put in so many terms that Sun could not afford to make the deal. "He basically blocked it," McNealy said.

Last night's forum, sponsored by the Churchill Club, was held on the 29th anniversary of the founding of Sun. Once the company went public in 1986, it was technically for sale, McNealy said. Sun fetched $7.4 billion from Oracle. "Twenty-nine years ago, if you had [asked] me, would you take that [offer], yes I probably would have taken it."

McNealy acknowledged wishing things had turned out differently, but he lauded Oracle for being a committed buyer when the other suitor, IBM, only sought an option to buy Sun. "Oracle came in and made a firm, committed, better-in-every-shape-or-form offer than IBM," said McNealy.

Asked to comment on Oracle's handling of Sun-derived technologies and Oracle CEO Larry Ellison's criticism of Sun business practices, McNealy said he had no idea about Oracle's handling of the technologies. Of Ellison, McNealy said: "Larry's a great capitalist and he's a wonderful guy, a good buddy and I hope he does really well with it." Published reports have had Ellison criticizing Sun for practices such as making unprofitable deals that nonetheless benefitted Sun salespersons.

McNealy said he owns no shares in Oracle.

Sun really was launched by Java and the Sparc hardware architecture, McNealy said. Getting prominent software engineer Bill Joy on board was key and helped Sun sell workstations. Sun's technology still ships worldwide, he said. "Fifty to 100 years from now, our technology is going to be there." McNealy also credited Sun with starting the now-popular trend of open source software.

McNealy warned against a growing public sector taking over the private sector, calling it the one threat to all technology companies. Growth in the public sector will drive out innovation, he said. The Obama administration's stimulus spending "is just spending more than you have," McNealy said.

These days, McNealy is chairman of two startup ventures, including Flogton, which is "not golf" spelled backwards and presents an alternative mode of playing golf. McNealy described the other venture as a "stealth" startup.

This story, "McNealy: Sun could have won out over Linux," was originally published at InfoWorld.com. Follow the latest developments in the technology industry at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.

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This story, "Sun Could've Beaten Linux, McNealy Says" was originally published by InfoWorld .