IBM buying Sun, sez WSJ

In Wednesday's IT Blogwatch, Richi Jennings watches bloggers ask, "Is IBM buying Sun?" Not to mention 61 things on my cat...


Editor's Update:


Dan "X." Nystedt reports:

Global technology giant IBM is in talks to buy Sun Microsystems in a deal that would expand its server market share, the Wall Street Journal reported Wednesday.

IBM may pay as much as US$6.5 billion in cash for Sun, the newspaper reported on its Web site, without naming its sources. That amount of money would be nearly double Sun's closing share price on Tuesday of $4.97 per share. The report cautioned that while the two companies are holding discussions, a transaction may not occur.
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Journal blogger Ben Worthen adds:

[It marks] the beginning of what is likely to be a new wave of acquisitions in the tech industry over the next 18 months. It’s the logical consequence of the all-out war for the data center ... that the industry is suddenly in the midst of ... The data-center land grab is starting to coalesce around three companies: H-P, IBM and Cisco.
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For years, IBM seemed to be moving away from such competition in the hardware arena ... In fact, IBM seemed to have little response to H-P and Cisco’s encroachment into its turf. The Sun acquisition appears to be its answer.
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Scott Bicheno runs with the angle:

One recent event that may have made Sun seem more tempting to IBM is the revelation that Cisco has joined the server market. IBM has been attempting to reinvent itself as a services company in recent years but it seems inevitable that it will always have to offer some kit. This deal would help IBM in that area as well instantly strengthening it in a variety of markets.
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Eric Lundquist focuses:

Today (Wednesday, March 18), Sun was scheduled to make a big cloud computing announcement. It is looking like Sun's cloud will be colored blue.
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If the talks turn into a marriage ... IBM acquires a really strong group of developers and engineers who have lived on the forefront of cloud computing and virtualization just as those two technologies are hitting mainstream ... Scott McNealy gets to proven right of all those predictions about the network being the computer and he continues to improve his golf game.
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Is Jeroen Leenarts a hindu?:

Sometimes you open up your feedreader and there’s one of those articles that make you go HOLY COW!!
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Yes it is a rumour, but imagine the impact of such a deal? What will happen to the OpenJDK, NetBeans, GlassFish, MySQL, Sparc and Solaris to name just a few. The stock value of Sun MicroSystems compared to their book value was a sure sign of some big things about to happen.
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Geoff Fox is cunning:

Sun's stock fell 4¢ to $4.97 Tuesday. That values the company at around $3.7 billion. I hope you bought in when you could.
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Sun is playing easy-to-get, shopping itself around to likely suitors ... what does IBM see that others may not? Maybe it's that they're both hardware companies that operate without benefit of Intel or Microsoft? They're also both big proponents of Linux and move pretty freely through the Open Source Software world.
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Andy Fox (no relation) hopes to be rich:

I’ve owned SUNW (now JAVA) for years and thought i’d be underwater forever, waiting for them to finally make some money from their technology– which is vast ... I initially paid 3.25 per share ... if IBM gets more serious about buying them it will certainly jump to around $5.75-$6/share.

I’ll have doubled my money. But it’s taken 3 years. And the heartbreak.
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But Matthew Aslett is worried:

Adeal to acquire Sun would hurt IBM’s profit margins and would be contrary to IBM’s recent strategy of acquiring software and services. There are complementary products in the Sun portfolio of course, but it would also add yet another server and processor architecture, not to mention operating system, to the IBM stable.

The open source implications could be interesting, however, especially if IBM were to consider “foundationalizing” (is that a word? It is now) Sun’s software portfolio. Just a thought.
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And finally...


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Richi Jennings is an independent analyst/adviser/consultant, specializing in blogging, email, and spam. A 23 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him on Twitter, pretend to be Richi's friend on Facebook, or just use boring old email: blogwatch@richi.co.uk.

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