Sun In Talks To Be Acquired By IBM

gandhi_2 writes "Sun Microsystems soared in European trading after a report that it was in talks to be acquired by IBM. The Wall Street Journal, quoting "people familiar with the matter," reported Wednesday that International Business Machines was in talks to buy the company for at least $6.5 billion in cash, a premium of more than 100 percent over the company's closing share price Tuesday. Officials of Sun and IBM could not immediately be reached for comment."

Comments

For $6.5b

[sanosuke001]

I'd sell in a heartbeat. In this economy, there's no guarantee anything will go well for a specific company. 100% markup on their stock? Even if they do make it through this downturn, no guarantee their stock will hit that level again anytime soon.

Now, if only the US gov't will allow it. IBM+Sun would be a huge company.

Re:For $6.5b

[Znork]

IBM is able to pick up a good company with solid products

Are there any specific products that Sun sells that IBM doesn't have equivalents of? Sun has some good products, but I'm not sure IBM is after any specific products rather than just buying customers in certain segments and getting rid of some competition as a bonus at a fairly good price.

a good long-term strategy

Sun has a long-term strategy? Not one that's the long-term strategy of the month, but something, eh, more long-term? Having worked with Sun stuff for more than a decade, that's one of the more irritating habits the company has; sudden changes in strategy, often accompanied with a total re-branding of large parts of their product series.

Re:For $6.5b

[SnapShot]

Are there any specific products that Sun sells that IBM doesn't have equivalents of?

Java?

I realize that this isn't a product, per se, but it seems to me that IBM has focused their company on the services and consulting side and many of those projects are Java-based. They'll be able to go to their clients and affirm that the next multi-billion dollar enterprise project will be built on "their" language that they are fully behind.

P.S. Can we please not start a Java teh sux thread! I'm mostly just curious what the value of being the "owner of Java" is to a company...

Re:For $6.5b

[Cheeko]

And HP's market cap is slightly larger than IBM's.

In terms of the competitive Landscape its really HP and IBM with Dell a distant third.

While Sun has decent market share it's been dwindling for years. Obviously there are some things to be reviewed in terms of competition, but I doubt it would hold this deal up. Fairly similar in terms of size/scope to the HP-Compaq merger.

To me this seems like a move to buy Sun's market share, pick up stuff like Java, and be able to strip some tech out of Solaris. I would expect that most of Sun's hardware arch would eventually be phased out, maybe port Solaris to Power if anything. Kinda see Sparc going the way of Alpha if a merger goes through.

Re:For $6.5b

[Pharmboy]

44% of the server market is surely nothing to sneeze at, but my guess is that IBM still has dreams of getting on the corporate desktop (which is the gateway to the home desktop) and Java, Solaris, Open Office/Star Office, plus all their contributions to Free software is part of the ticket to compete with Microsoft in the next decade. This is particularly true if you believe that the OS will become less important as more applications are created as web applications, making it not matter if the OS is OS X, Win7+, Linux, Solaris or some "new" Java desktop.

Re:For $6.5b

[fm6]

There are many technologies at Sun that IBM might covet, but no one of them is worth that much money, or even a substantial part of them. They'll certainly want Java, but Java is mainly a server-side technology these days. It's client side tech is floundering, both marketwise and developmentwise. Same goes for Solaris. (Sun's workstation lineup is down to one system!) As for OO/SO, IBM already has a free office suite, and it's not doing any better.

Having a realistic alternative to Windows is every geek's dream, but I don't see anything that Sun owns really changing the game. And big companies like IBM don't really have any incentive to revolutionize the desktop — not that much money in it, and there are too many risks. Which is why IBM has moved away from desktop computing in recent years.

Re:For $6.5b

[curunir]

Java is mainly a server-side technology these days. It's client side tech is floundering, both marketwise and developmentwise.

This is a situation that could change if Sun were acquired. Sun has been pushing developers to use Swing on the client side and, while Swing may be popular with developers, users don't like it because of performance and the non-native feel. But IBM would likely push developers to use SWT instead. It's being used in a surprisingly large number of applications. That most people don't realize it's being used is a testament to both it's performance and it's ability to appear native (because most of the widgets are native with a Java API). SWT gets a bad rap because its poster-child application (Eclipse) can be a resource hog and run slowly in many situations, but from my experience that's not a failing of SWT and more a reflection of the complexity involved in writing and IDE and the design decision to make the IDE so heavily extensible by third parties. If IBM did acquire Sun, I would bet that one of the first changes made to Java would be to include SWT and JFace with the 1.8 JRE.

Java's failings on the client side are, IMHO, a reflection of the lack of ubiquity of SWT and Sun's NIH syndrome when it comes to Java technologies produced outside of Sun's control. Those two barriers can be broken down if IBM acquires Sun.

First Thoughts ...

[Anonymous Coward]

are that this is probably the best that Sun can do but I have to say that the reduction in competition in that space would be concerning.

I've been wondering for a while what Sun was going to do, let's be brutally frank, they were never going to get rich from Java or MySQL, especially as open source, but had little choice in keeping them closed source. I just hope IBM keeps Java, Open Office and the rest as they are and doesn't start to try to make money off them.

Re:First Thoughts ...

[Mark Round]

"I just hope IBM keeps Java, Open Office and the rest as they are and doesn't start to try to make money off them.".

While this is a valid concern (remember, Sun is by far the largest open source contributor out there), that'd be the least of my concerns. I'd be more worried if some software or hardware would even be continued.

I can't see a merged company running duplicate lines of hardware OR software, and whichever way it goes, people are going to be pissed. Just look at the HP/Compaq train wreck, and that was relatively mild in comparison (Tru64/HP-UX etc.). With Sun and IBM, they've got to choose between either a massive duplication of effort, or pick one of Solaris/AIX, MySQL/DB2, SPARC/POWER, Galaxy/iSeries, Storagetek (including the ZFS-based products like Thumper/Amber Road)/IBM storage, Websphere/Glassfish, Netbeans/Eclipse - the list goes on.

Both companies produce such an enormously varied range of hardware and software, I just don't see it working without some serious cuts and massively pissed off customers. Those Tru64 customers didn't all just take it on the chin and migrate over to HP-UX like the good customers they were supposed to be, for instance. If you were working in a x64 Solaris shop, and got told that your migration path was to AIX on POWER, would you move ? Or would you take your business elsewhere ?

Re:First Thoughts ...

[John Bayko]

IBM has a long history of not only tolerating, but actively developing and promoting non-mainstream products. They still develop several operating systems (z/OS - from mainframe System/360 days, i5/OS - from AS/400, and System 38 and System 36 before that, AIX), and support others (Windows, Linux, Solaris), all to give customers no excuse for switching to a competitor. They support x86 servers, POWER based System p and System i (recently unified), mainframe System z. As well as blade versions of some.

This is in sharp contrast to HP, which gleefully killed off good products (and customer satisfaction) for feeble marketing reasons (like a market strategist would even know the difference between an Alpha and Itanium).

So there's a good chance that IBM would keep alive a lot of Sun hardware and software, only consolidating as needed. For example, System/36 and System/38 were merged into AS/400 smoothly enough to keep both sets of customers happy. And OS/2 was kept on life support for years just for those customers who had comitted to it, even if there was no new development for it. Maybe AIX and Solaris could be merged (AIX has a lot of partitioning magic and reliability tricks useful for IBM hardware that could be added to Solaris), the two companies' Java versions would do well with just one, and so on. But I doubt that Sun products would be wholesale slaughtered by IBM like some other companies might.

Re:This could be Schwartz' greatest trick ever.

[Alomex]

To be fair, the decline of the Unix server market started about 12 years ago with the release of NT4.0 and the first true industrial grade linux servers. One by one all the big unix manufactures have fallen (apollo, sgi, ncd, dec, hp, aix) and now sun.

It is not clear if anyone could have arrested Sun's decline, short of acquiring Dell eight years ago...

I question the future of Open Office, Netbeans,...

[OTDR]

I genuinely question the future of Open Office, Netbeans, Java, et al if IBM acquires Sun. I'm not implying there will be a malicious or concerted effort to kill any particular product or anything, it's just IBM. Long before there was a Linux community I was a die-hard OS/2 user (the best single-user OS there ever was) and before that worked years for an IBM dealer. IBM was, is, and always will be a company of brilliant engineers that can't market water in a desert. Continually-shifting reprioritizations, undercutting of third-party support, you name it -- they kill their own products by their own sheer idiocy.

Re:A boon to open source

[TheRaven64]

Mod parent +1 funny.

Sun finally come around to the idea of open source? Sun, the company founded by early BSD developers, which actively contributed to BSD back before there were x86 chips capable or running a real UNIX? The company that bought StarOffice to open source it, and still contributes about 80-90% of the developer time to OpenOffice.org? The company that open sourced their entire enterprise UNIX stack, to the benefit of other systems (DTrace and ZFS in FreeBSD are really nice. It's a shame Linux has a license that's too restrictive to allow it to incorporate other features, but if you pick a restrictive license you have to live with the consequences). Not to mention Java and all of their Apache-related contributions, or their work on PostgreSQL and their purchase and continued support of MySQL.

Still, IBM has open sourced AIX and Notes, and their database systems. Oh, wait, they haven't. They've put a little work into the Linux kernel, some into Xen, and a bit more effort into Eclipse and a few Java-related projects, but they've made smaller contributions to the Free Software community overall (unless you count marketing dollars) than Sun in spite of being almost two orders of magnitude larger.

Just because IBM shouts louder than Sun about their commitment to open source doesn't make it a fact.

Re:This could be Schwartz' greatest trick ever.

[guruevi]

The decline of the overpriced server market started with the availability of cheap commodity (desktop) hardware being used for server-grade systems. People don't always need 100% uptime (as Windows is a great example that people don't even think about it) and they aren't willing to pay extra to squeeze every ounce of performance and reliability out of those machines. Those people are willing to live with a few hours per month of downtime or they just invest in a failover server. The Sun's (as well as SGI and DEC machines) are very 'expensive' but they won't fail as fast nor will the failure be as disastrous (eg. RAID controllers taking a whole array of data with them).

I have had experience you can say with every type of hardware out there. It's not unusual to see a Sun Workstation or Sun Server (where I currently work we still have a few Ultra's chugging) that have been purchased in the 90's. Even their hard drives haven't failed yet and have layers of dusts because people either forget about it or are afraid to touch it. However I have never seen a Dell that was more than 5 years old that either hasn't been replaced yet or had some major (hardware) problems with it. The same goes for hardware with PowerPC processors, those things keep living even after they've been off the market for years and the performance of an Apple with a quad core G5 is almost similar to the previous Mac Pro's (with Xeon processors) on most loads. Just now are the Xeon's (either the Nehalem architecture or the higher frequency versions of the previous) passing the G5's on such a level that you actually notice.

IBM kicks back a lot more code than you think

[Anonymous Coward]

Google "Linux Technology Center" or "IBM Internal Open Source Bazaar" and be educated. IBM just hasn't taken sides in the distro war. Instead of putting distros out there, IBM is kicking a lot of money and code into the Linux kernel and a lot of the core software that makes up your favorite distributions.

IBM probably contributes more code back to the FOSS community than Novell, potentially more than Red Hat.

Quite a few of the "who's who" of the FOSS world work at IBM writing the code that you're now using.

Re:A boon to open source

[TheRaven64]

Reality is that the CDDL has restrictions on derivative works that are very similar to the GPL restrictions

Not true. The CDDL and GPL both have restrictions on derived works, but that's not the problem. The GPL also has restrictions on things that are not derived works and happen only through linkage. If the kernel had been LGPL'd, then the CDDL would not be a problem. You can link CDDL'd code with code under any other license without the CDDL causing issues. Apple links CDDL'd ZFS code against APSL'd XNU code, for example. Neither the CDDL nor the APSL is GPL-compatible, but in both cases it is due to the GPL containing clauses which cover more than the code that was originally GPL'd.

The fact that OS X and FreeBSD, with very different but not copyleft, licenses can both use DTrace and ZFS shows that it is the GPL, not the CDDL which is the problem. The GPL is the license which imposes restrictions on code linked against it. The CDDL imposes conditions in the CDDL'd code itself, but has no problems being linked against code under any other license, unless the other license objects.

Re:IBM and Microsoft: symbiotic relationship

[gtall]

"IBM exists as a giant IT behemoth today, precisely because Windows sucks, and they know it. "

I don't think so, IBM makes mainframes and has a very large services effort, neither of which compete with MS. If there were no MS, IBM would still continue to exist.

IBM might decide that MS cannot be left alone because MS is always on a continual jihad to bork everyone else, including IBM. So mere self-preservation would make IBM think of ways to compete against MS...not so much to beat MS but to keep them busy enough MS won't have what it takes to bork IBM.

SUN stands for. . . .

[jafac]

Stanford University Network.

I think most people are lacking the historical perspective to understand the broader symbolic meaning of this buyout.

SUN represents everything about computer evolution, the computer is the network, Silicon Valley enterpreneurship, crusty - bearded old Unix guys, hacker culture, West Coast Innovation, etc.

IBM represents New York, East Coast, old-school business mentality, mainframes, closed-source, proprietary, white-shirt-and-tie cubicle-dwelling programmers.

It's the end of the Net as we know it.

If you look at the "1984" Apple Commercial: Big Brother just won.