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Users, analysts weigh in on Sun/StorageTek deal

┬┐StorageTek saw the writing on the wall,' says one analyst

June 2, 2005 12:00 PM ET

Computerworld - Sun Microsystems Inc.'s announcement today that it plans to buy Storage Technology Corp. in a deal valued at about $4.1 billion could be good for both companies, users and analysts said this morning. But which company will ultimately reap the most rewards from the deal remains uncertain.
Under the agreement, Sun said it would pay $4.1 billion for Louisville, Colo.-based StorageTek. In turn, StorageTek investors will receive $37 per share in cash. The result, according to Sun and StorageTek officials, is a company that offers a wide range of data management services to handle security, storage, privacy and regulatory compliance requirements.
"It's pretty interesting that a server vendor decided to spend over 50% of their cash to purchase a storage company," said Jed Dobson, system architect at Dartmouth College in Hanover, N.H. "What I get from that is they're definitely going to take another look at their storage strategy."
Dobson operates a storage-area network (SAN) made up of all Sun disk storage systems and uses all-StorageTek tape libraries, including the midrange the L700 and L180 models, for data archival. Dobson likes the combination of the two companies and hopes the merger will help him more tightly integrate his back-end storage subsystems and boost the service he receives.
"I think it will help it quite a bit. Sun service people may not be knowlegable about storage. If I was a StorageTek customer and didn't have any Sun, I might feel differently," he said.
John Halamka, CIO at Boston-based CareGroup Inc., said the buyout probably wouldn't affect his operations.
"StorageTek has been making a move into storage management software and SAN-attached disk storage, but I don't believe it yet represents a significant portion of their business," Halamka said. "Tape is still their game, and they are the 800-pound gorilla in that court.
"As long as Sun keeps the StorageTek products generic so they play well with any OS, it should not make much of a difference to us whether the tape storage units have Sun on them or STK," he said.
Gary Theus, a field support supervisor at Thompson Hine LLP, a Cleveland-based international law firm with about 360 attorneys, said the deal would be good for StorageTek because it shores up that company's move into the disk drive market while giving Sun the tape business it has lacked.
"I've got to believe it will only be good for" StorageTek, Theus said.
"I just think that StorageTek saw the writing on the wall that the tape market is declining and they needed to get into the disk business," said Brian Babineau, an



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