Feeds

Bigger Indigo - shades of AT&T's NCR grab

Deal due Friday?

Beginner's guide to SSL certificates

Comment Rumor has it that IBM will acquire Sun Microsystems on Friday morning.

I am not by any means suggesting I have the kind of hard information that the Wall Street Journal seems to have been able to get its hands on - probably from people within Sun or IBM who don't want to see the deal go through. I am hearing things fourth hand, but from people better connected than I am and who I trust. That doesn't make it any more real, mind you.

Anyway, one rumor I heard is that the deal will be announced on Friday morning, if the companies can come to terms. Oddly enough, I'm also hearing that the acquisition will be tucked up underneath IBM's Software Group, with the Systems and Technology Group playing second fiddle. That seems pretty odd to me, considering that Sun is largely still a server and operating system maker with a Java application development business bolted onto the side. But this whole Bigger Indigo deal being a bit crazy anyway, I wouldn't be surprised if this last bit was also true even though it makes but little sense.

Neither IBM nor Sun ever confirmed the original reports in the Journal or the subsequent ones about the lawyers at Big Blue going over Sun's contracts and licensing deals with fine-toothed combs. And when I asked an IBM spokesperson late yesterday about this latest rumor - that the deal would happen on Friday - I was given the obligatory no comment. Sun has similarly gone quiet, and it even delayed its "Nehalem EP" server announcements, which were expected on Monday, until April 14. Sun's stock price, still hovering above $8 a share, indicates that Wall Street hasn't totally lost hope in an acquisition, and IBM is above $100 a pop in New York this morning, which means Wall Street doesn't seem to mind if IBM does the deal.

Without any confirmation of talks, much less an announced deal, there is another more ominous possibility. What if IBM doesn't do the deal? And what if IBM was just window shopping all along, so it could get a look at all the goodies inside of Sun? IBM not doing the deal could be just as detrimental to Sun as doing the deal will surely be.

The more I think about this deal, the more it looks like AT&T buying NCR to me (which AT&T eventually spat back out, you will remember), unless IBM spins off the Sparc business to Fujitsu. (Which would only mean that IBM does the AT&T-NCR two step in one step).

The Bigger Indigo acquisition does not look or feel anything like Hewlett-Packard buying Compaq back in 2001, when HP needed a better services business and a volume PC and server business to match its Unix server and printer businesses. IBM doesn't need to own Java to use Java - it needs another operating system like it needs a hole in its bottom line, and even at $8 a share, or around $6bn with no premium over today's market capitalization for Sun, that is a lot of money to eliminate a competitor.

It seems unlikely that the Antitrust Division of the Justice Department would make much noise about Bigger Indigo, but the deal does leave us with two choices: IBM or HP. You can have your computers in blue or gray. Pick one.

There might be cheaper ways of destroying Sun - but perhaps there are none quicker.

Bootnote: After we went to press with this commentary, the Journal put out a report from the ever-popular "people familiar with the matter" that Sun has agreed to a lower sale price for itself, perhaps in the range of $9 to $10 per share. That compares to the $10 to $11 per share Sun was willing to accept a few weeks ago, according to the Journal story that broke the news of the IBM acquisition.

The latest Journal article said Sun is worried that the acquisition could drag on for months as antitrust concerns, particularly in the market for large servers based on Unix, are addressed by regulators. Sun wants some sort of lock in, apparently, so IBM stands by its engagement commitments, all the way down the aisle to marriage. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
IT crisis looming: 'What if AWS goes pop, runs out of cash?'
Public IaaS... something's gotta give - and it may be AWS
Linux? Bah! Red Hat has its eye on the CLOUD – and it wants to own it
CEO says it will be 'undisputed leader' in enterprise cloud tech
BT claims almost-gigabit connections over COPPER WIRE
Just need to bring the fibre box within 19m ...
Oracle SHELLSHOCKER - data titan lists unpatchables
Database kingpin lists 32 products that can't be patched (yet) as GNU fixes second vuln
Ello? ello? ello?: Facebook challenger in DDoS KNOCKOUT
Gets back up again after half an hour though
Hey, what's a STORAGE company doing working on Internet-of-Cars?
Boo - it's not a terabyte car, it's just predictive maintenance and that
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.