So what will happen to Sun?
The new Silicon Valley parlour game
HP or IBM
What about HP? It doesn't need another proprietary server line. It OEMs HDS's high-end storage as the XP line so this would be a neat fit with Sun's similar 9900 line. It could probably run the StorageTek tape business better and the LTO part of that would fit its own LTO activities. Industry-standard servers could be merged with HP's own products.
Open source? Don't think so- but maybe. There are zillions of developers using Sun SW, and Java is something HP might love to have under its belt. Just think of the HP upsell possibilities here and the wringing of more revenue out of these customer and user bases by HP's better business management. An HP takeover doesn't look outrageously impossible does it?
How about IBM? It could merge StorageTek tapes with its own mainframe tapes and so dominate that business. The open source stuff could be combined with its own. SPARC servers could transition to Power and X86 ones to IBM's own X86 line. The open storage stuff would probably fade away and the drive arrays would have to transition to IBMs own arrays. It would be a massive and lengthy transition and not a likely prospect unless IBM could buy Sun at a discount.
The same goes for EMC and HP. All three companies would have problems negotiating an acceptable mid-point between their ideas of Sun's value and that of Sun's shareholders and executives who still think the company has a golden future. They would want that future valued whereas to outsiders it's all too likely that they think Sun will just stumble on with continually weakening product offers and a customer base ripe for plucking.
Any EMC, HP or IBM takeover of Sun would be followed by the pensioning-off of Sun's executives and chairman. That wouldn't be the case, necessarily, if Sun sold off part of its business. It could, the speculation goes, sell the SPARC business, the server business entirely perhaps, to Fujitsu, which is buying out the Siemens share in Fujitsu Siemens Computers. It might offload the StorageTek business to, perhaps, Quantum, maybe HP, even IBM - no other tape automation vendor looks to be in a position to buy it.
Pain or gain
Somehow Sun has to cut its costs and cut them big time, to get them well below its revenues and so become a growing business again. If McNealy and Schwartz are ready to cash up and go into retirement then a company sale is more likely. If they are not, if they can smell the money they assert the company's strategy will eventually bring in, then it's more likely they'll sell off a lump of Sun that is not central to that strategy.
Are McNealy and Schwartz tired or still hungry for business success. That's the key. Can they feel the money or do they just see more pain? If it's money they scent then an asset sale is possible. If it's pain then a company sale is likelier. Is it retirement and associated admitting of defeat or redemption that beckons? We all want to prove something ,but there comes a point when we just don't care any more. Is that moment approaching for Sun? ®