If IBM/Sun breaks down, what happens to Sun?

As I write this, on Sunday evening, April 5th, it appears that the IBM/Sun deal is dead in the water. I say 'appears' because this wouldn't be the first, or last, time people threatened to walk out of a deal as a negotiating tactic. You see, I think IBM buying Sun is the best possible thing that could happen to Sun and its product lines.

I say that because Sun has been dying for years. I know it. You know it. The market, which has seen Sun's stock drop 79% in 2008 alone, certainly knows it.

Sun has been a sick company since its dot com boom days. In the aftermath of the dot-com crash, Sun initially couldn't decide if it was a hardware or a software company. Then, under CEO Jonathan Schwartz, Sun slowly, ever so slowly, decided it wanted to be an open-source software company instead of a closed-source business.

Sun took too long to change. The hardware business may have brought it billions in the 90s, but those days are long gone, torn down by the rise of the low-cost AMD/Intel Linux servers. Sun open-sourced Java, but it still keeps too heavy a hand over it despite the JCP (Java Community Process). Sun's billion-dollar purchase of MySQL just last year appears to have been a billion bucks poured down a rat hole as MySQL programmers leave Sun behind to work on their own versions of the popular open-source DBMS (Database Management System).

No one else except IBM seems to be interested in buying Sun. I can understand why. I think IBM is the one company that can take Sun's various technologies and make them profitable.

HP? Dell? They're hardware companies. Oracle? Why? So Larry Ellison could kill off MySQL? You can't kill off open-source software. Kill one project and two forks will appear to take its place. Microsoft!? There's no synergy what-so-ever.

Sun should be able to make it on its own. But, failures like the MySQL collapse tell me that they can't. How can you take such an over-whelming popular program as MySQL and, within a year, alienate both your customers and your developers? Darned if I know, but Sun managed it.

No, if Sun really does auger in to leave a smoking hole in the ground in place of a merger or acquisition, the fate of Sun will be the same one as another company that was once a multi-billion dollar name in Silicon Valley. The name? SGI (Silicon Graphics Inc.). This one mighty business' shattered remains were just sold to Rackable for $25-million.

It took SGI over a decade to slump from $3.66 billion in annual revenue to its first bankruptcy. Sun made $3.22 billion in its last quarter, but, without the IBM deal, its fall will come far, far faster.

IBM buying Sun?

Full coverage in Management


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