A daily digest of IT news, curated from blogs, forums and news sites around the web each morning. We highlight the key commentary and demystify the real story.
In a special IT Blogwatch Extra, Richi Jennings watches the latest play in the IBM/Sun acquisition saga. It seems that IBM wants to pay less, but Sun isn't happy with that, so the deal's off -- or is it? Not to mention IKEA slapstick...
James Niccolai reports on the breakdown of negotiations:
IBM and Sun Microsystems have been unable to reach agreement on the terms of an acquisition, with the talks nearing collapse on Sunday, according to news reports. Sun's board rejected a formal acquisition offer from IBM on Saturday, considering the offer price too low, The Wall Street Journal said.
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Sun had been seeking assurances that IBM would not walk away from the deal ... [but] IBM considered the requirement too onerous ... The companies may yet resume talks. But for now, the stance between them was described as "confrontational."
Paul Hales puts it more succinctly:
IBM has decided it doesn't want to buy Sun now ... A couple of faceless blabbermouths told the New YorK Times that Big Blue has taken back its $7 billion offer to buy up the outfit.
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Reports that Sun executives were being a bit sniffy about IBM's offer are said to have led to the move.
Miko Matsumura predicts tough times for Jonathan Schwartz:
Pundits are already spinning this FAIL WHALE as a repeat of the Microsoft Yahoo! debacle starring another egotistical company founder, Jerry Yang.
Butting heads with Scott McNealy at Sun Microsystems is ill advised. Even if you are the CEO ... Schwartz is toast, IBM deal or no deal. If the IBM deal fails completely (most likely outcome), look for Scott McNealy to pull a Michael Dell (or a Jerry Yang, depending on how you look at it) and to appoint himself CEO again. The board of Sun wouldnt allow such a thing if there were even one viable suitor left. But there isnt.
Steven J. Vaughan-Nichols watches the Sun go down:[You're fired -Ed.]
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.
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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.
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No one else except IBM seems to be interested in buying Sun.
But segfaultcoredump has another suggestion:
Cisco + Sun would make more sense. Mostly because there is very little overlap in their actual products but their two lines constantly need to work together. (Our sun servers are connected to Cisco ethernet switches, our SunRays vpn into Cisco vpn concentrators, our Sun Storage is connected to Cisco MDS switches, etc). It would also give Cisco the biggest, baddest InfiniBand switch on the market (and at 110Tbps, its switching capacity totally trashes anything cisco has ever produced).
The biggest problem with the Sun+IBM deal was that there was so much overlap, customers would be left to wonder which product lines would get discontinued. (glassfish vs websphere, solaris vs aix, sparc vs power, sun's servers vs ibm's, storage, tape, etc, etc, etc.)
Smackintosh calls it the best IT news he's heard in a long time:
IBM was sure to 'consolidate' a great number of things. And I'm sure any remnants of Sun left after this process would have been IBM-ized. And I do say that with a great deal of negative connotation ... Our choices for 'iron' and 'OS' variety in the IT space would have been reduced as I'm sure overalpping server lines would disappear, as well as perhaps an OS.
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We'd have lost one of the most innovative enterprise I.T. companies ever. Say what you will about their ability to turn it into large $$$, but Sun has come up with some of the most innovative ideas the server-related I.T industry has seen since their inception.
Trent "QuantumG" Waddington cuts to the chase:
If you're an executive in a company and the suitor making the offer won't agree to a golden parachute then it doesn't matter to you how much they are offering per share.
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.
