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Massive Sun cuts planned as IBM focuses on software trio

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If IBM purchases Sun Microsystems - as expected - the fallout will be brutal.

IBM staffers have, according to a Reg source close to the parties, been talking to Sun about its software portfolio and - unsurprisingly - they don't like what they've found: It's not making any money.

IBM's now interested in three Sun software assets: the open-source MySQL database, Java, and Sun's Solaris operating system.

The rest, including all that open-source work Sun's spent years building and hyping, will succumb to that classic of big vendor lingering deaths by being, ahem, "released" to the "community".

A third of Sun's staff, meanwhile, will immediately be cut. This could come through layoffs or the sale of divisions where there is overlap with IBM's existing business.

That would be a huge cut for anyone and much will depend on what is meant by "immediately." However, if it happens, that could see 11,000 Sun employees cut, based on the company's current head count.

Sun declined to comment on what it called "rumors and speculation" while IBM was unavailable for comment at the time of going to press.

The cuts would be made because the software is very much an afterthought to the deal. IBM is only interested in Sun's hardware business as a way to stop Cisco Systems' recent break through into servers with the release of its California Unified Computing System.

This is of course assuming IBM's deal proceeds in the first place. The Reg understands that while Sun is committed to an agreement, IBM is uncertain - one possible reason why IBM reportedly dropped its proposed purchase price from $10 to $11 per share to $9 to $10.

Currently, a deal is expected during the next week at the latest, although this could slip.

Where would the trio of MySQL, Java, and Solaris fit in the new organization?

MySQL would serve as a low-end business to IBM's DB2, and extend IBM's reach among systems partners, as well as making direct sales to customers. About 40 per cent of MySQL's business is in the OEM market. MySQL would therefore be to the database what Gluecode was to IBM's WebSphere in application servers.

Owning Java would help ensure the platform's continued survival to suit IBM's own goals, while opening up the prospect of revenue from licensing and support of Java with OEMs, ISVs, handset manufacturers, and services providers - the only way Sun's made money on Java.

Solaris would give IBM's Global Services business the opportunity to support and maintain existing customers.

It's likely the remainder of Sun's software would be quietly punted out to the Apache Software Foundation or released under an Apache license. IBM is an experienced backer of both.

One potential winner in this scenario would be Apache's Project Harmony, which is backed by IBM. Harmony's been locked in a long-running disagreement over licensing of test-compatibility kits (TCKs) with spec-lead Sun. Without the TCKs, Apache cannot prove Harmony - an implementation of Java Standard Edition (Java SE) - meets Sun's official compatibility standard.

Apache's Java Community Process (JCP) representative Geir Magnusson Jr recently accused Sun of doing "tremendous damage" to Project Harmony.®

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