HP and Sun expand partnership...what about a merger?

HP and Sun expand partnership...what about a merger?

Summary: Hewlett-Packard and Sun will announce details of "their newly expanded partnership agreement" Wednesday morning. Might this be a step towards a merger?

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Hewlett-Packard and Sun will announce details of "their newly expanded partnership agreement" Wednesday morning. Might this be a step towards a merger?

I've long been a proponent of a HP/Sun combination, there are some strong synergies such as:

+Both have strong (and green) datacenter technologies. They could dominate cloud computing.

+HP would get Sun’s range of SPARC systems and an impressive future technology road map for SPARC microprocessors. This is a great challenger to IBM and its proprietary 64-bit Power microprocessor architecture. Margins on proprietary hardware are four to five times better than on industry-standard systems.

+HP would gain from Sun’s large accounts in financial services and telecoms. These sectors are huge IT spenders.

+Sun needs a much stronger services arm, and HP has a strong IT services group.

+HP would gain Sun’s middleware, v.important against IBM’s WebSphere middleware. Middleware software has a very high profit margin.

+Both companies could consolidate their computer labs.

+Sun’s Java technologies have consumer electronics and mobile phone applications and momentum.

The cultures of the two companies are the largest obstacle because they strongly conditioned to see each other as the "enemy." But this could be turned around and IBM could become the enemy that unites them. It could become a West Coast versus East Coast thing.

Granted, IT buyers will have fewer options, which isn't a good thing.

Topics: Data Centers, Banking, Enterprise Software, Hardware, Hewlett-Packard, Oracle, Processors, Software, Storage

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8 comments
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  • RE: Solaris and Java

    I can't help but wonder what HP would do to Sun's software assets in the event of cutting operating costs. (economic downturn etc)
    Seeing as they're fundamentally of a hardware mindset.

    It would be beneficial to their survival (Solaris & Java), if they were spun off from Sun. Just like Filemaker was from Apple.

    Can you recall anything of Digital Equipment's brand surviving the acquisition by Compaq? (-->HP)
    Custard_over_2x_Pie
  • Probably more of a services thing than hardware

    From the services side, EDS has a lot of business with Sun. From the hardware and software side, HP already has multiple hw platforms (x86, Itanium, PA-RISC) and UNIX operating system options. Why would it want more?

    Unless HP is finally willing to abandon the Itanic in favor of SPARC (they are the sole remaining customer for Itanium) then the move would make more sense.

    Finally, owning Java might be interesting, except there is no direct revenue stream from it. If they want middleware, buying Tibco is a better option, and much less expensive even at Sun's low share price.
    terry flores
    • Maybe SUN is looking for the Nobel Prize?

      Remember when Microsoft gave them $75 million to keep operating; or was it to enhance their own run-time environment? Boy do we have a lot of run-time environment in today's Microsoft.
      rtirman37
    • SGI uses Itanium processors in their Altix line.

      And everything I've read about the processor indicates it is a good performer.
      ye
      • SGI? Are they still around?

        Uh, doing a quick ticker check, they are, sold about $80M in kit last quarter, losing $49M in the process. Doesn't sound like they will be around much longer using that metric ...
        terry flores
        • They're definitely not the company they once were.

          But they're still around.
          ye
  • I doubt it

    why would a company that is experiencing weaker then normal sales at the moment in the current economic situation want to merge with a company that, for all intents and purposes, a money pit?
    GuidingLight
  • Remember Digital !!!!

    Anyone remember a company with great technology that got eaten by a PC vendor?
    Compaq got its filthy paws on Digital hoping to benefit from it's technology and expertise. At the end, it just brought them both down until HP acquired Compaq.

    Sun also has great technology and is also down on it's financial luck. I just hope that this 'partnership' does not consume Sun, they really have great servers and Operating System

    Spirovski Bozidar
    http://www.shortinfosec.net
    Bozhidar