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Cisco Systems chief executive has taken his company out of the running for a possible Sun Microsystems acquisition.

John Chambers has reportedly said if his networking giant and server wannabe were interested in a deal, then that deal would have happened by now.

"Cisco moves very rapidly on acquisitions," he said. "If we were going to be in an area, we would probably have already moved."

Of course, if Cisco is interested, then a denial would be the best way to help get Sun at a good price.

Companies and Wall St traders are known for using the media to talk down stock prices of competitors and also of companies that they are potentially interested in buying.

Sun's stock was down again in the wake of Chambers' reported comments, trading at $6 a share - down 2.4 per cent on Wednesday morning. At the same time, Cisco's stock was worth nearly three times that of Sun's, trading at $17.71.

Sun is still going cheap, and is affordable. It's sitting on a cash pile of $2.64bn, less than half of a few years' back. Cisco has cash of $29.5bn.

While the numbers might work, though, it would be difficult to see why Cisco would be interested in buying the whole of Sun. Yes, there's talk of Cisco's move into applications and middleware, but that assumes Sun has products or a strategy worth buying in the first place.

As a whole, it doesn't, but there are pieces that might be attractive. Java and MySQL could make sense on network, server, and device hardware.

Judging by last week's $150m purchase of Tidal and the work with BMC on its California Unified Computing System, Cisco seems more interested in the field of application and systems performance and life-cycle management. That puts Cisco on track for potential competition with IBM on Tivoli and Hewlett-Packard on OpenView.

That leaves the actual server hardware. Cisco couldn't do wrong by getting hold of Sun's engineering brains - especially on multi-core, virtualization, and blade-server engineering - and on manufacturing facilities to help build more Unified Computing Systems.

Chambers might be right: a deal for the whole of Sun would have happened by now, if Cisco were interested. A deal for the parts, though, could be back on the table as Sun's investors turn to Plan B after the Plan A of a company acquisition by IBM is off the table.

Plan B has been floated before, after all, when Oracle and HP teamed up to divvy up Sun's assets, with each taking software and hardware. Just now, with IBM out of the frame, the investors will be keener than ever to achieve their overall goal of realizing Sun's "true economic value". ®

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