IBM & Sun Agreement Puts Pressure on HP

eldavojohn writes "IBM has turned to long time rival Sun in an effort to bring Solaris to its mainframes. Sun may be taking this chance to drop out of the server market while at the same time capture Solaris subscriptions via IBM sales. Either way, this certainly pressures HP in the server department."

Comments

Keeping Solaris Relevant

[d3xt3r]

I don't buy the idea that Sun is looking to bail out of the hardware business. What they are looking to do is keep Solaris relevant. Sun doesn't want you to think Solaris requires Sun hardware. Sun realized that the only option for people wanting to go with x86/x86_64 chips and run a Unix-like OS on supported hardware meant running Linux or buying Sun gear.

Sun is looking to eat some of Linux's lunch. The question is, why is IBM interested?

why doesn't IBM just buy Sun?

[m2943]

Why doesn't IBM just buy Sun? They'd get control of Java and Solaris, they could kill the Sun/Microsoft dealings, and they'd get Sun's server customers. Granted, at 16B, Sun is probably still somewhat overvalued, but I think such a deal would be good for IBM overall.

Re:why doesn't IBM just buy Sun?

[stevesliva]

I think that Sun may finally not be overpriced. It's forward P/E is similar to IBM's. I guess it depends on how correct the analysts are about Sun's prospects next year.

I've often wondered if IBM would just up and buy Sun, but there's a few reasons I think it would be a poor acquisition. First of all, the past five years or so have proven that the remaining Sun customers will not jump ship just because Sun's not building the fastest or cheapest unix boxes. These customers stick around because, for some reason, they like Sun. I won't speculate as to why, but there are quite a few reasons why that can be. If IBM buys Sun, those customers immediately like Sun a lot less, because they've been choosing Sun over IBM for years. Secondly, IBM has worked very hard for the past couple decades to never retire any substantial enterprise architecture. Combining AS/400 and RS/6000 has been a decade long project with the loyal AS/400 customers being skeptical the whole way. What does Sun bring? A second proprietary flavor of Unix, another line of RISC unix boxes with a different architecture, another blade chassis, and this newfangled exotic Niagara/Rock architecture. Looking at IBM's server history, they'd retire none of this, and development costs wouldn't decline. They'd rather that Sun foot the bill for continuing development of UltraSPARC and Solaris for a static or declining market, rather than buy those customers only to chase them away when killing the architecture, like what happened with Alpha. I don't see IBM paying $25B to Sun to merely begin making Sun's business worthless. (And I don't think that was the plan with DEC-Alpha, but I don't think Compaq planned on getting enveloped by HP.)

IBM wants growing businesses that improve their profit margin. If IBM could buy select parts of Sun, they might, even if they hardly ever make hardware acquisitions, but they really couldn't get the good without the bad, and even if they did, who knows what goodwill is lost when the profits go to Armonk rather than Silicon Valley?

Re:This is dissapointing.

[mjt5282]

Are you kidding me? Sun has just announced the T2 (Niagara 2) processor - 64 concurrent threads. High speed 10G networking. Built-in encryption support for apache. Sun is still in the "game" - its just that the "game" has changed and Sun can no longer make money selling $1M USD refrigerator-sized servers. Hopefully, Sun can make money by selling the most technologically advanced sub $20K servers that are optimized for scalability, throughput and middleware (Databases, web, infra etc).

Re:Solaris is only irrelevant if you play with toy

[M. Baranczak]

Gotta love the Solaris fanatics. Next I suppose you'll be telling me that Linux isn't "real Unix".

Solaris is a fine OS, and it's got some features that nobody else has. But in some areas it's about 10-15 years behind Linux and BSD. Don't take my word for it - take a look at what Sun itself is saying. Here's a few excerpts:

Solaris installation is ugly, slow, and difficult.
...
We use outdated networking technology (RARP and Bootparams) by default, rather than contemporary network protocols, and thus are often unable to automatically determine configuration attributes that are easily discovered by our competition.
...
We don't include the right set of initial configuration tasks, such as an initial user account, that are commonly provided by competitors. This results in an installed system which boots, and can be logged into as root, but it's then up to the user to hunt around and find a tool (or, more likely, edit the configuration files directly due to our paucity of tools and poor integration of those that exist into the desktop) to create a usable account.
...
One of the significant deficiencies in Solaris compared to our Linux competitors is our ability to easily install additional software after the initial installation.

Well, the good news is that Sun is actually working hard to fix these problems.

What's in it for IBM

[Daishiman]

Disclaimer: I work for IBM.

IBM is becoming primarily a services company, doing systems development, "solutions architecture", and outsourced operations. A LOT of people at IBM are familiar with Sun technology and have used it at one point or another. Heck, most of the Global Services staff that maintain AIX servers also maintain Solaris servers. How hard do you think it would be for IBM to expand their business saying "Sure, we support Solaris. We can build that payroll system that you need for your company on your existing Sun infrastructure. BTW, can we interest you in a new pSeries for these workloads?".

Indeed, this is opening up a new area of the market where they can now claim expertise and recognition. And when the installed customer base is satisfied with what they have, it'll be 10 times easier to migrate their hardware to IBM stuff, and software to IBM proprietary OSes, if there's more profit to be made there.

Sun is not dropping the server market...

[Fallen Kell]

They have too many new technologies in active development for them to drop out of the server market. Their new Sparc processors, and motherboard chipsets truly have major advantages over current Intel offerings. The new T2 processors in a 4 or 8 CPU system can and will stomp over anything out of Wintell (64 threads per CPU, time 8 CPU's makes 512 ACTIVE processes at a time in a single box! Now imagine a beowulf or grid cluster of those! Hell, simply imagine a single rack!). No, Sun isn't leaving the server market, they are simply expanding their OS market, nothing more. Which is a good thing. The more hardware that can run Solaris, the more it will be seen by new people who may not be familiar with it. The new capabilities for self healing processes, zones (think like VMWare, but each is running a contained Solaris, without a ton of overhead from having the separate kernel instances, as well as being able to portion exact percentages of resources to each zone. This allows multiple "budgets" too pool together and buy a big(er) server then they would otherwise and have assurances that each group would get at a minimum X% of CPU time (or memory, or bandwidth, etc., etc.) on the system, where X corresponds to the percentage of the cost that the department/group/unit paid to purchase the server, and if no one else is using the system, well, you get to use all its resourses...).

No Sun is far from leaving the server market. Very, VERY far.