Dell sees IBM rumor as chance to steal share from Sun

IDG News Service - Michael Dell said Tuesday that he sees a potential acquisition of Sun Microsystems Inc. by IBM as an opportunity for his company to secure more customers and a greater share of the enterprise computing market.

Dell, speaking in Tokyo, said customer concerns over how Sun's technology would fit into IBM's existing business would accelerate a shift from Sun's Sparc and Solaris platforms to the more standardized x86 and Linux systems offered by Dell Inc.

"Just the rumor of IBM potentially purchasing Sun creates an enormous opportunity," he said.

The first report of a potential deal came last Wednesday when The Wall Street Journal said IBM was considering paying up to $6.5 billion for Sun. Later in the week, the newspaper said IBM lawyers were examining Sun's contracts and other documents as part of a due diligence process that could precede an acquisition.

"All of the Sun accounts are very concerned about what will happen to the Solaris platform and the Sparc microprocessor," said Dell. "If you look at IBM's computer business with the Power processor and x86 processor and Z-Series mainframes and all the different operating systems, and you throw in Solaris, it's not at all clear, if you talk to any industry analyst, how all of that gets consolidated.

"It's absolutely true that Sun has share that is in transition, but we are actively working with large numbers of Sun customers to move those from the Sun Solaris Sparc platform to an x86 Linux platform, and that migration is under way," Dell said. "I think this accelerates the migration and sends a lot of those accounts into opportunity."

Sun is No. 4 in the server market, with revenue of around $1.2 billion last quarter. That puts it a little behind third-ranked Dell, which had revenue of $1.4 billion; Hewlett-Packard Co., at $3.9 billion; and industry leader IBM, with server revenue of $4.9 billion.

"For the last several years, there's been a migration of customers from the Sun Sparc and Solaris platforms to x86 and Linux, and I think this rumor has increased the nervousness of those customers and accelerated the anxiety and desire to move," Dell said.

However, a purchase of Sun by IBM could present Dell with some challenges. By acquiring Sun's accounts, IBM could find itself in a more advantageous position to pitch its own x86- and Linux-based servers.