With IBM having moved away from hardware in the past few years in lieu of focusing more on services business, it might seem odd that Big Blue would be interested in acquiring Sun Microsystems. But analysts say it's Sun's software that IBM really has its eye on.
"The technologies of greatest interest to IBM are Java and Solaris, and those are notably not hardware technologies," said David M. Smith, an analyst at Gartner.
According to The New York Times, the dollar amount being discussed comes close to $7 billion. That breaks down to about $10 per share, or twice Sun's closing price a day before news of the negotiations broke out. Immediately following, shares of Sun shot up just shy of 79 percent on Wednesday to close at $8.89.
Should the merger take place, IBM and Sun would account for about 65 percent of the market for server computers running Unix and 42 percent of the total server market. Citing "a person involved in the discussions," NYT reports an antitrust review would be forthcoming, with the issue being how regulators define the server market. When viewed by numbers of server computers sold, the playing field looks a lot more even, as IBM and Sun would only account for 18 percent of the market.
(Image Credit: IBM)
Comments are closed on this article
mojosico
March 20, 2009 at 4:43am
sun is not a one trick pony . i think ibm misses not making hardware since they sold that to leveno . they still have a x86 license to use . i also think the star office/openoffice.org projects would be a interesting update to the lotus office suite . yes they still make the lotus office suite and offer a free version as well , but who besides I.T people and a few oldschoolers knew that lotus was still around . solaris is a linux dirivitive , and remember a month or 2 back ibm said they wanted to stop using microsoft products ? so lets see a operating system . check . a well known office suite . check . hardware manfractureing . check . java is somthing that is part of all web browsers and web sites and has the power to make any company change to its will . check . the chance to give microsoft a black eye . check . i dont see a problem here i think it will be great that ibm will be able to make alot of different companies nervous for a change . so mojo thinks this is a win for us pc users and a win for sun and ibm . WORD!!!!
horzo
March 20, 2009 at 8:34am
Solaris and Linux are both UNIX derivitives; Solaris is not a Linux derivitive.
IBM sold only its consumer hardware division to Lenovo. They still make enterprise hardware. Sun does not now and never has made consumer hardware. All IBM is getting from Sun's hardware division is a bunch of products no one wants.
quickone
March 20, 2009 at 6:33am
I would love to see OpenOffice after it gets the resources avaliable to IBM (not that I don't think Openoffice is great now). If IBM puts their weight behind it they could make a strong advance on MS Office, especially if they can get MS to support the open document format by defult.
nekollx
March 20, 2009 at 9:40am
office 10 (you know the one that is supose to coem with win7) does supose ODT though...
ghot
March 19, 2009 at 4:34pm
Java these days is getting bloated and far too internet freindly for my tastes. The JRE6_12 update spends all day every day trying to phone home...somewhere. Even my firewall doesn't like Java anymore.
Take efficiency, and edit out all the intelligence and what you have left is a post-XP Microsoft operating system :)
horzo
March 19, 2009 at 3:51pm
No one buys Sun hardware anymore. I don't understand why Solaris still exists other than to support legacy hardware and big corporate IT shops which fear Linux. Basically, you're talking about $5-$7 billion for Java.
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