Sun buys Linux server appliance specialist Cobalt for $2bn

'Our bet for the future' - so this is important, right?

By John Lettice • Get more from this author

Posted in Business, 19th September 2000 14:50 GMT

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Sun is to buy server appliance specialist Cobalt Networks in a stock swap worth approximately $2 billion. Cobalt's roots are in Linux/MIPS small server appliances for small offices and Web sites, and as one of its products is the Qube, presumably rights to rattle lawyers at Apple and Mr Jobs will come with the acquisition.

The serious point of the deal from Sun's point of view, however, is that Cobalt's target market and Linux base is an extremely good fit. Sun doesn't have a great deal of trouble at the top end of the server market, but is still trying to figure out ways to deal with Linux and the lower end.

According to Sun president and CEO Ed Zander Sun is buying Cobalt "to establish ourselves in low-end server appliances and immediately jump into the marketplace with a proven, world-class product offering... We think the demand for these high-volume, turnkey devices will explode in the next couple of years. Cobalt is our bet for the future."

Which is quite a serious ambition to have for small but perfectly-formed Cobalt. Cobalt is to become Sun's server appliance business unit, within the Network Service Provider organisation. ®

Related stories:
Cobalt drops MIPS for x86
Gateway opts for MIPS-Linux for Web server offering - and whatever happened to that deal?

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