Sun following the IBM deal collapse: Customer confusion en route
Sun Microsystems won't be acquired by IBM after all. Now the explaining---mostly to customers and shareholders---really begins.
Sun will tell its customers that the IBM deal was just a slight detour and that the company's plan to be a pivotal hardware, cloud computing and software provider remains intact. The big question is whether customers will buy Sun's talk---not to mention Sun's gear. For shareholders, Sun has to explain why it split over the IBM offer.
Shareholders aren't pleased with Sun.
Meanwhile, the Wall Street Journal is reporting Sun's board is split (Techmeme). CEO Jonathan Schwartz wants the IBM deal. Chairman and Sun founder Scott McNealy doesn't. Guess who wins that one? McNealy, who is dead wrong by the way, will return armed with quips and probably bring the company back to its hardware roots. It won't matter. But Sun customers only need to know one thing: Schwartz's strategy (see the stack at right) focusing the company on software is in flux.
Schwartz gave Sun a software spin. McNealy may change that approach.
Given reports that Sun had been shopping itself around and could only find IBM as a suitor, there's a decent chance that the company will remain independent for a bit. However, any customer buying from Sun will have to consider the ramifications of a purchase. For instance, if you're about to buy Sun hardware and HP is in the running why wouldn't you opt for the latter just to eliminate some uncertainty. After all, HP could buy Sun. What about cloud services? Will you trust your cloud to a company that has a tug-of-war underway over a buyout?
Look for Dell, IBM and any other Sun rival to pounce with the fear, uncertainty and doubt game. In the grand scheme of things Sun was small potatoes for IBM. For Sun, the failure of the IBM-Sun talks was huge.
Every question about Sun will come back to the company's future plans. Do you buy Sun's roadmap five years out? Do you assume that Sun's cloud services will ultimately be absorbed elsewhere?
Given recent events, a tech buyer would be foolish not to incorporate Sun's future owner---and management---into any buying plans and use the IBM flap as leverage.