IBM could buy Sun Microsystems

Summary:Talks are possibly underway for the systems giant IBM to buy Sun Microsystems, according a report in Tuesday's Wall Street Journal (WSJ) in what could be a grab for market share.However, the WSJ did say that, "it is unclear whether the negotiations will result in a transaction".

Talks are possibly underway for the systems giant IBM to buy Sun Microsystems, according a report in Tuesday's Wall Street Journal (WSJ) in what could be a grab for market share.

However, the WSJ did say that, "it is unclear whether the negotiations will result in a transaction".

The two companies have a common interest in the use of open source, Linux and Java, in the data centre which could free them from being reliant on software from Microsoft.

Any deal would also strengthen IBM as it fights with HP to be the number one in the systems market and in the data centre. HP took the number one spot from IBM when it purchased EDS in 2008.

It is too early in any transaction to know the value of a possible sale of Sun to IBM but the WSJ did suggest that "IBM is likely to pay at least $6.5bm (£4.6bn) in cash to acquire Sun".

This is a time of likely change in data centre strategy by the major companies. Part of this will be as a result of Cisco's move into data centres on Monday. Both IBM and HP will have been working out how to react to Cisco's move into their specialist area and a move by IBM to buy Sun would be a first step.

Tony Lock, an analysts with Freeform Dynamics said that a possible purchase of Sun by IBM would be a "logical move" but that the companies had "very complementary strategies".

Topics: After Hours

About

Colin has been a computer journalist for some 30 years having started in the business the same year that the IBM PC was launched, although the first piece he wrote was about computer audit. He was at one time editor of Computing magazine in London and prior to that held a number of editing jobs, including time spent at the late DEC Compu... Full Bio

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