IBM could buy Sun Microsystems

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".

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TOPICS: After Hours
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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".

Topic: After Hours

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Colin Barker is based in London and is Senior Reporter for ZDNet. He has been writing about the IT business for some 30-plus years. He still enjoys it.

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  • IBM could buy Sun Microsystems

    Sun being bought by another company has been talked about many times before -- Dell has sometimes been the name floated in previous discussions. Dell has <a href="http://news.zdnet.co.uk/hardware/0,1000000091,39290815,00.htm">shipped Solaris on its servers</a> before, and has little technology overlap with Sun -- no OS or processor designs of its own -- whereas IBM already has its own version of pretty much everything Sun has to offer.

    However, if Sun is going that cheaply, it may be worth buying it just to eliminate some competition when economic conditions improve.
    Jonathan Bennett
  • IBM could buy Sun Microsystems

    Should we lend any credence to this rumour? I am not sure it is any guide but I was checking out the Sun website researching another story about Sun and was impressed to find Sun's own site covered with this takeover speculation. Do their web people know something we don't?

    On a more serious note, the urge to take out some competition and grab market share must be high on the list of motives moving to buy Sun.
    Colin Barker
  • IBM could buy Sun Microsystems

    Of course it's just a total coincidence that JavaOne and IBM's Rational Software Development Conference fall somewhat unusually on the same days this year.

    As I said total coincidence. Don't read anything into that whatsoever.
    Adrian Bridgwater-3dc6b