IBM is in advanced talks tobuy Sun Microsystems, valued at
approximately $6bn (£4.1bn). The sale raises questions over the
future availability of Sun's hardware and software products, and
long-term support for IT departments.
A deal would allow IBM's share in the server market to grow to
42%, which would position IBM to compete head-on with the likes of
Hewlett-Packard, Dell and Cisco.
IBM may also be better placed than Sun to turn the latter's
software business to profitability and therefore to compete with
Microsoft on platform and office productivity technology.
Sun, founded in 1982 by three Stanford graduates, made its name
developing cutting-edge technologies such as the Sparc
microprocessor architecture, Java and OpenOffice. Yet recently, Sun
has lost ground against rivals HP, Intel, IBM and Microsoft.
Many think that Sun simply took too long to support the Intel
industry standard PC architecture, allowing Windows Server software
running on Intel-based server hardware to muscle-in on Sun's home
ground - supplying high-powered servers to high-tech start-ups.
Struggling to
perform
Sun has struggled against falling demand for hardware this year.
In the second quarter of its 2009 financial results it reported net
income of $140m, down from $409m in the last quarter of 2008.
According to Sun CEO Jonathan Schwartz, IT departments are cutting
back on buying Sun servers and storage products in the
downturn.
Sun's recent acquisitions, such as its $1bn purchase of MySQL
and the $4.1bn acquisition of StorageTek in 2005, have not paid off
in the way the way the investment community would have liked.
"The MySQL purchase was intended to give Sun a lynchpin role in
the open source world. But the shift to get open source religion
was too late. The acquisition is not going well for either side:
Schwartz clearly overpaid by hundreds of millions of dollars, while
MySQL is being strangled by the Sun bureaucracy," says
Joel West, associate professor at San José State University, in
a blog post
So if Sun needs to be sold, the question is whether IBM is the
best suitor?
How will Sun shine in Big
Blue?
Clive Longbottom, service director at Quocirca, says it would
make more sense for Fujitsu, rather than IBM, to buy Sun. They
already have common ground: Sun uses Fujitsu to manufacture its
Sparc processor, and Fujitsu already sells Solaris servers.
Longbottom believes that if IBM does purchase Sun, it should
make Java open source, making Java ubiquitous and licence-free.
IBM has a choice. Either hand over Java and MySQL to the
open source development community
Eclipse, or offer a viable software alternative to Microsoft.
Some would argue than the open source community is a better home
for MySQL and Java than Sun or IBM.
But that still leaves Sun's server, workstation, storage and
Solaris businesses, which do not fit well with IBM's current
product portfolio.
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