Intel chief: Sun was 'shopping around' for buyer

Intel chief: Sun was 'shopping around' for buyer

Summary: Intel chief Paul Otellini says Sun had been looking for a company to buy it for some time before IBM took an interest

TOPICS: Tech Industry

Sun had been looking for a company to buy it for some time before IBM took an interest, according to Intel chief executive Paul Otellini.

Otellini's comments were made public in a filing on Wednesday with the US Securities and Exchange Commission (SEC). According to the filing, he said he did not think IBM's potential purchase of Sun had been spurred by the announcement on 16 March that Cisco was developing its own datacentre strategy. 

"I don't know if the Cisco entry spurred IBM," Otellini said. "I think [a low Sun share] price spurred a lot of interest."

Otellini suggested that one of IBM's motivations was that it was "trying to consolidate architectures".

"IBM has the strongest Java licence in the industry," he said. "By picking up Sun — which is the creator of Java — they [could] really consolidate their position not just in Linux, but also in Java."

Sun had been "shopping around" for a purchaser in the past few months, Otellini said, and a "lot of companies got calls or visits on buying some or all the assets of the company".

Otellini said he thought the IBM effort to buy the company would be successful, as it could get a "100 percent premium" on what the share price had been before the stock markets fell.  "It looks like IBM is in the hunt now," he said.

The Intel chief had bad news for Sun Sparc and Solaris users, when he predicted that "the stuff on Solaris and Sparc is likely to see EOLs [end-of-life] over time through the IBM acquisition". There was "no strategic reason for IBM to maintain that except to attempt to convert the very large Sun Sparc/Solaris base to power", he added.

Sun's share price was at $7.85 (£5.38) on Thursday, and the company is currently valued at $5.85bn.

Topic: Tech Industry


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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1 comment
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  • In for a little stormy weather?

    So, from Sun to Cloud!

    What's next? Thunder? Lightening? Rainstorm?

    Whatever the case may be, the move is interesting in the fact that 2 industry majors are in the process of consolidating resources, technologies, processes etc. Could this be the 1st marker of the inevitable 3rd Wave for computer technology and the race for control of the desktop?

    Watch this space.