back to article IBM 'in talks' to buy Sun Microsystems

IBM has opened acquisition talks with Sun Microsystems, raising the prospect of a massive consolidation of the software, server and storage markets. According to the Wall Street Journal IBM has mooted a price of $6.5bn. Sun is currently capitalised at $3.7bn ($4.97/share), but its share price has persistently fallen since the …

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Anonymous Coward

StorageTek and regulators..

Well,

First thing is that is a surprising news... expected but still!

Regarding the products that SUN got from StorageTek these will probably be the problem for this acquisition; regulators will probably force IBM to spin off StorageTek as a seperate company; I can thing of some clients that would never touch those products again if they go into IBM's hands.

By the way, last time I checked most of the disk storage products than SUN and IBM sell are made by Engenio... so that's an easy situation to solve!

In the end I don't know if this is going to be a good or bad thing for the overall IT industry....

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Alert

Wow

Wow, if this takes place, then I guess there are going to be a heck of a lot of SUN employees out of work. "You are not losing your job, it has just moved 2000 miles away. Do you want to commute or move?"

AC, because I work for Big Blue and got a great bonus this year.

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Linux

So long MS

Your old foe is coming to haunt you.

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Isn't Storagetek and IBMs FCAL storage rebranded LSI?

I thought LSI supplied both Storagetk and IBM with there mid-highend disc arrays, including snapshot and replication sw. If so there would be no intergration apart from chossing the colour of the paint.

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Are you watching Fatty?

Are you watching Mr Hurd. IBM are going to buy the manufacturer of some of the best large scale kit on the market. Better than your rubbish anyway. It will also make IBM bigger than HP again , whichever way you measure it.

How many more times are you going to rob and rip EDS staff off to get your profits up again and boost your not inconsiderable ego/wallet after this one Fat Boy?

Go IBM!

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Stop

M&A

"Mergers and Asses"

If the banks can't make money scamming mortgages anymore they may as well convince some idiotic, absurdly badly run IT companies to merge. Ker-ching!

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Unhappy

Wow! This is massive!

Then there were two - effectively...

Whilst I have always been more of a Big Blue man rather than a fan of Sun kit, I have always admired Sun for their innovative (and different, but not in an Apple way) approach to the IT industry.

Solaris is a good OS, albeit with a few quirks! I remember having to compile an IBM i/o library just so that PHP's mail function could work with that rather than Solaris's stdio. Took a while to find that solution I'll tell you. However, the reasons behind why Solaris wouldn't let PHP do what it wanted to do were sound when you took into account other factors such as the way iPlanet (SunONE) worked.

All I can say on this article is that it was a sad day when DEC disappearred (especially since I longed for an Alpha), it was a sad day when Compaq went HP and it will indeed be a sad day when the Sun sets too.

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Silver badge

Sharp Tools and Surgical Strategic Strikes

.... .... Skilled Craftsmen @ Finessing Fine Prior Arts Work.

Ahha ... the David Sun has spooked the Goliath IBM with its Stealthy Prime Cloud Performance..... and now realise they have a Easily Targetted Achilles Heel in their International Business Machine....... and want to Control and Profit from the Intellectual Property Portfolio which can Render them Obsolete? Oh dear, what a Shame that Embrace, Extend and Extinguish is the Blue Pill they will themselves have to Swallow 42 Survive?

Or maybe the Industry Giants are circling the Wagons as the Storm Clouds/Apache Renegades gather Force and Virtual Power that Controls Everything in AI Singularity, CyberIntelAIgently Protected in an Invisible and Intangible Cloak well out of the Reach and Influence of the Corrupt and Perverted Control of Decrepit Legacy Systems Levers...... Big Sticks and Blunt Instruments?

Three Striking Questions in a Row...... Wow. And none of them Spin either.

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Happy

IBM managed to make money from Java, and Sun never really did

So, there's an irony here. IBM picked Java up, wrote better tools, more popular (although horrible to code against) J2EE server.

It does make sense for everyone, the engineers married to the people who can actually sell things and still understand engineering.

Fiorina destroyed the innovative base at HP and Hurd wouldn't know innovation if it bit his bits off.

Here we have two competent innovators, a great sales team, a consultancy arm with a reasonable rep. I'd be scared if I were HP or Microsoft. very scared.

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Unhappy

Sad day for Sun

First Schwartz decimates the stock price though incompetence, now he wants to sell the company to the one competitor whose corporate culture is guaranteed to make all the top innovators at Sun walk straight out the door, just as the economy starts to recover and startups begin to appear again to welcome them. No doubt ponytail will get a nice payoff, of course.

I wonder if he's considered a career in merchant banking, or British politics? He seems to have the required skillset.

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IBM and Sun?

Now THAT is a partnership I'd buy shares in. Open Source, platform independant software and the technical (and financial) muscle to really kick ass?

Give it 5 years. They'll either be dead in the water or utterly dominating the market.

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Not a good thing at all.

I can't see this being of benefit to anyone, apart from IBM, HP, Intel and Microsoft. To really set the cat amongst the pigeons Oracle of Cisco buying Sun might be more fun.

A lot of todays processor technology was driven by competition, now we are moving from 3 main architectures to two, really bad for innovation and competition. Would Intel ever have come up with the T Series idea, OK IBM has the cell, but not really the same thing, and will they look to push this into Power/Intel space, i think not.

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Gates Halo

@AC Wow

I work for Sun, who headhunted me last year after 10 years as my own boss. No way I'd have moved to work at any Sun office I've seen, but no problem, I work from home, out in the sticks. So do many at Sun: for example, the entire MySQL "virtual organisation".

If IBM (or AN Other) were to take over, I'd consider working for them on similar terms - if offered.

Mind you, I'd have thought competition authorities would have something to say about a takeover in a case where there are only three players in the major core market of top-end servers. Quite apart from things someone already mentioned ...

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Sad day

I would agree with AC above. I can't see the regulators allowing IBM to take the StorageTek business. Clearly the mostly likey suitor for that would be HP.

If the merger kills Sparc products for the IBM acquired server product lines I can't see Fujitsu paying more than a dollar for Sun's current Sparc division. Sparc will be oficially dead, and Fujistu, rather than buying the division will more likely be closing their own. Which would be really sad, as yet another great architecture bites the dust under the remorseless steamroller of the second rate x86.

However IBM will have a significant incentive to keep the high end Sparc servers rolling. IBM Global Services wing sells to and services a huge number of sites that are still Sparc/Solaris shops. There is more money in the services than the hardware. IBM GS was at one stage Sun's single biggest account. Protecting their stakeholding in these sites by keeping Sparc alive may be a very economical thing to do.

Still, it will be a great shame to see Sun vanish. Somewhere in a back room we still have a Sun-1 with a serial number in the low 300's. Much affection for the company.

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Anonymous Coward

Nothing to worry HP

a) This is unlikely to go through. There's little synergy and IBM can't make money on (non-proprietary) hardware. The regulators may have something to say about it as well. If it does go through it will be a vanity purchase to return IBM (briefly) to pole position.

b) IBM have a long record of FUBAR all their takeovers. The existing staff all get canned and replaced by clueless IBM droids. ISS is just the latest in a long line.

Now if Cisco expressed an interest ...

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Interesting times ahead

OK so it's pure speculation but here's a few thoughts on what it could mean:

Sparc/PowerPC: IBM could ditch Sparc in favour of PowerPC but I'm not sure that would be a good idea: there are a lot of good things in the Sparc T1 and T2 processors. In particular, the T1 and T2 are more power efficient than the PowerPC so it may be worth deploying them in a power efficient range of servers.

Solaris/AIX: agree with you, it would make sense to merge the two and consolidate into one OS. The first hurdle would be to make Solaris run on PowerPC but it can surely be done.

Java: no brainer here, IBM has been a strong contributor to Java for a long time.

OpenOffice: no brainer either, OO.o is the basis of the latest version of IBM's Lotus Notes so that would give IBM the control of the whole stack, as well as a way to monetise it through Notes.

NetBeans/Eclipse: there are good things in both IDEs so consolidating in this space would be great. IBM already monetize Eclipse through Rational Modeler and friends.

Glassfish/WebSphere: there's some potential for consolidationg here too. Keep Glassfish as the open source app server, consolidate the Enterprise version with WebSphere and offer an easy upgrade path from one to the other.

MySQL/DB2: same sort of scenario really, consolidate, make MySQL the entry level option with easy upgrade to DB2.

Now that's my opinion and it may be complete dinkum but if there is one potential buyer that has a lot of synergies with Sun, it's IBM.

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Silver badge

Keeping IT in the Family can be Incestuous

"Activist investor Southeastern Asset Management became Sun's biggest shareholder recently and some of the recent restructuring efforts have been thought to be influenced by this. Schwartz has consistently said he wants to work with this investor to increase shareholder value."

Would that activist investor be an Uncle ..... for, in these critical chaotic times, a United Network Command for Law Enforcement ...... might very well be a Spooky Clandestine Cover for a Nasty Dose of the Thrush, for the Mission Accomplished Diehard Head Case/Psychotic Village Idiot/Fool on the Hill Type ...... Technological Hierarchy for the Removal of Undesirables and the Subjugation of Humanity.

No wonder they didn't like the following message flashing up on their computers screens ..."US foreign policy is akin to government-sponsored terrorism these days... It was not a mistake that there was a huge security stand-down on September 11 last year... I am SOLO. I will continue to disrupt at the highest levels." ...... whenever it so clearly expresses the view shown on media and supported by foreign speculative expeditionary action on the ground and in fiction too.

Haven't the Yanks got a Proper Script Writer yet? There is certainly no Apparent Evidence of them having Engaged with the Special Services of One of them and far too much Evidence of them NOT having a Writer for Maximum Utility..... Intelligence Community Directive Number 208, Effective 17th December 2008.

For Goodness, Splash out some Flash Cash and do yourselves a Big Red, White and Blue Favour and Buy One in. How much Simpler can IT be? It is not as if IT is Rocket Science even though IT can take you to whatever Planet and Strange Worlds you would care to mention. QuITe whether it is Intelligent or just plain Stupid to go to some of them though, is quite another matter.

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Just fixing some FUD...

"Sun makes proprietary Sparc RISC servers" - why proprietary? The CPU is an open standard (see sparc.org), the OS is open source. People consider Intel x86 hardware "open" because it's ubiquitous, but it's Intel that's just going to sue AMD's spinoff Globalfoundries for the right to manufacture x86-compatible CPUs...

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100% premium and what?

Then they own two implementations of Java, two implementations of Unix, pretty much two of everything. What's the value in that?

Oh, I know, they'll sack what's left of the Sun workforce and have eliminated the competition. And they'll have to carry that 100% premium as goodwill on their books until someday they decide they have to write that down.

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Avi
Coat

Finally! Ultrasparc Thinkpads!

Mine's the one with the Psion Netbook in the pocket.

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Hardly a surprise though is it?

That pony-tailed plank had it coming for yonks, anyone could see that there would only be three options, IBM ( they have the money, but do they have the balls to take it on? ), MS ( unlikely they'd even get anywhere near it with the monopolies comm. on their back ) or a conglomerate of smaller tech firms trying to grab a ready made chunk of the server room market, but would most likely be too much in-fighting amongst anyone to make it work.

Just pay that corp puppet off and put someone in charge with some sensible ideas and some chutzpah to actually make proper decisions. Sun made a big mistake not trying harder to push for a share of that very rich VM hosts market, imagine how many X86 VMs you could run on yer average pukka Sun box?

Muppets, the lot of 'em! Quicker IBM get in, the better!

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Unhappy

Netbeans!

Waaaaaa! No, Eclipse, No!

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Paris Hilton

Office anyone?

OpenOffice and StarOffice come into the equation too... Making the IBM office offering pick up some speed again.

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Gold badge

Re: So long MS

Old foe? My, how some people have such very short memories....

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Unhappy

Not good news

This is not good news for Solaris. I'm a stock holder in Sun and I would vote no on any merger that involves IBM or HP.

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And so the giant lives on

>> "Mainframe survivor IBM absorbing Sun is an apt confirmation of its status as the survivor of the IT age."

Seems fitting, considering that IBM was around before them, for it to remain standing after they're gone. It also says something about the "small and agile" strategy and "new" business schools of thought.

Unfortunately, it also means that the same can be applied to the Microsoft behemoth, within its limited industry: that it is large enough and stable enough for it to adapt to changing market pressures and still dominate, if at least by pure endurance.

-dZ.

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Anonymous Coward

There is no surprise here

Those of us who've been watching Sun's downward spiral for some time now knew that Sun has been positioning itself for acquisition for about a year. Potential buyers have just been waiting for the right time to pick Sun up on the cheap. That time is now, but IBM is the only tier one vendor with the cash to do it.

Ah, the folly that Schwartz wrought! No one has ever made any real money off of open source. And the margins on their x86 and Niagara gear are too thin. The beginning of the end for Sun was when they dumped SPARC V and put all their eggs into the Rock basket. I think it's pretty much a given now that we'll never see Rock.

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Anonymous Coward

McNealy :

You'll have no company any more. Get over it.

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Coat

aww

Aww crap. That's all of Sun's software f****d up then. Seriously - look at IBMs current offerings - Clearcase, ClearQuest, Lotus Notes, etc - all software that seriously needs to be taken out the back and killed (ideally painfully, but speed is the most important) before it can make anyone else's life a misery.

Oh, hang on, no, then I'd be out of a job converting people to real software....

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Paris Hilton

Sun will die soon

IBM will buy the corpse before the autopsy, Storage is great, their servers are great, however the market has changed so much that E25s are underpowered, overwatted windtunnels, dynamic reconfiguration was a great idea, but is rarely reliable, virtulisation is king now, Zones are great, but why bother on E25s when you have nice domains? the X5nnn series are truely wonderful but only when they are used properly for the correct application (in many cases replacing obscenely expensive E25s).

All of which leaves Sun in no mans land with great technology, fantasic OS but a limited hardware line-up (or a limited target), Sun *needs* IBM to have a market and the gloss that Sun brings could make IBM shine (ditch AIX, port Solaris please......)

This will be a giggle.

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Jim
Silver badge

Go Sun

It's sad that a dynamic, innovative company like Sun may come under the dead hand of IBM. I don't think this would be good news for the industry as a whole. It's also sad that whoever is in charge of Sun has unearthed failure in (what was previously) a garden of success. On reflection, open sourcing Solaris was probably a bad idea, or was done too soon.

I am reminded of HP buying Apollo in the early 90s. Another terrific innovator crushed into mediocrity.

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Paris Hilton

A sad day for customers

This is sad for the computer industry. Not because Schwartz (aka pony tail boy or PTB) and his crew deserved any better, but because customers deserve a choice other than HP/Dell Win/Lintel or big blue. There is way too much overlap, and the result will be lots of good products and people getting the axe. IBM is a very well run company, no doubt, but further consolidation is not what the industry needs.

A much better move would have been to get rid of PTB a year ago and bring in someone who actually knows how to run a company. Another move (although probably too late) that would be better for all would be to sell out to Fujitsu. A lot of great synergy there and the result would be most products and people still around, other than PTB.

--AC because I still work in the biz and now a lot of people on all sides of the deal.

--Paris because the great pony tailed one and Paris have more in common than they know

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IT Angle

Little Suntain

Is it just me or does that bloke look a hell of a lot like David Walliams from up close?

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CC
Black Helicopters

There could be worse

All in all, IBM is one company that continues to truly innovate and does make good sound sense for Sun to do this if they want to stay alive in the future.

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Silver badge
Stop

copyrights 101

If IBM where to buy SUNW then IBM owns the copyrights to the solaris kernel. No open-sourcing of AIX would be required. Actually, under the terms of the CDDL, adding any component of Solaris to AIX would not be an issue even if IBM didn't buy SUNW.

Repeat after me: "open source is not the GPL." There are a list of open-source and "libre software" licenses out there, many of which are not as restrictive as the preferred license of the stallmanites.

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Unhappy

Wonder

Wonder what this means for Solaris and OpenSolaris in particular

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Flame

Re: 100% premium and what?

"Then they own two implementations of Java, two implementations of Unix, pretty much two of everything. What's the value in that?"

At last, a voice amongst the dimwits either claiming that "it'd be great" or pooh-poohing Sun as usual. Consider similar "un-synergies" (to repurpose the language of the M&A types):

HP buys Compaq buys DEC: goodbye DEC Unix (perhaps not such a loss), Alpha (far superior to the competitors), and most of the innovators. Why bother buying a company only to kill off all the stuff that "isn't our own"?

"Oh, I know, they'll sack what's left of the Sun workforce and have eliminated the competition. And they'll have to carry that 100% premium as goodwill on their books until someday they decide they have to write that down."

Indeed. Naturally, a bunch of people don't consider Sun to be competition, so we'll have the armchair pundits fantasizing about the "real benefits" of such an acquisition: people who think combining organisations is like pooling together all the toys at the nursery.

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Bronze badge

Who they should have bought

Back when Apple was still using PowerPC chips... they should have bought the Macintosh. That is, of course, on the assumption they could and would keep it alive, but perhaps Steve Jobs, without IBM's resources, is actually better suited to that.

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@Bruno Girin

> The first hurdle would be to make Solaris run on PowerPC but it can surely be done.

Solaris 2.5.1 ran on PowerPC, I still have a CD somewhere, so yes it can be done.

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Boffin

Virtual servers

If this mad scheme goes through, expect IBM to host both Solaris and Linux under AIX in virtual servers.

Forklift the Sun kit out, replace it with a virtual image and recompile (over time) to native.

It's a pity, but the SPARC has gone out of my relationship in Posixstan.

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Anonymous Coward

Well, the truth is the truth

Schwartz has been an awful CEO. Why Scott McNeely didn't dump him is a mystery. I guess friendship trumps fiduciary responsibility, in some cases. Sun was once an innovator, but note the past tense. All it has done over the past few years is buy open source softwares and cobble theme together with spit and bailing wire. Then there's the Rock vaporgear and their attempt to convince everyone that their light threaded CMT gear is a suitible platform for all workloads. That's not the Sun many of us have worked with for 20 years.

Sun is setting. Sad, yes, but inevitable.

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Paris Hilton

moot

"According to the Wall Street Journal IBM has mooted a price of $6.5bn. "

What has moot got to do with this I'm going to check on 4chan

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Unhappy

What happens to Sun hardware?

I work in Sun's hardware division. It looks like IBM will not be interested in Sun's hardware and servers... does that mean I'll be out of a job after this merger? I do believe that things are turning upwards in the hardware division... too bad we're all going to be benched. Nevermind, I'll just go somewhere else and innovate for someone else. :-)

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Paris Hilton

Impact of a Sun + IBM merger.

This deal will impact NetApp since IBM OEMs their products and will not make sense to do that anymore after the merger ....

This deal will impact Redhat too, since IBM would make more money selling Solaris than Linux on X86...

I see no major problems in AIX and Solaris integration, the future will be definitely be Solaris, and AIX customers need not to worry about migration since Solaris will have AIX Branded Zones to run their apps without any change... They could even brand the Power version as SolaiX :-)

This is a good deal for IBM if it goes through... The price is quite low, 0.5 times revenue, however another bidder could show up... or the deal might fall, it's not like IBM did not tried to purchase sun before ...

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Unhappy

Adios Sun....

I agree with those who say that getting Cisco to buy Sun would shake up the IT industry more and be a much better corporate culture match, but I am not sure that Cisco wants to take on that workload on top of entering the virtualized server market.

So I guess Sun is in play right now, and I don't think HP or Cisco will go after it--so IBM (or JUST maybe Fujitsu) wins by default. Farewell to what was once a terrific innovator in the server and software fields which never found a good business model to compete with the post-dotcom X86 Wintel/Lintel behemoth :(

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How about Apple

Rather than giving IBM two of everything, what if Apple bought their way into the enterprise? Little overlap there, but matching technologies -- high end hardware, excellent OS, well liked by engineers.

Gives Apple a way to start selling to Enterprises - "Want a top of the line desktop and server, and all from the same company?"

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Jobs Horns

Careful when you knock teh competition - you may be selling their products tomorrow!!!

I was in a meeting with IBM salespeople yesterday - and they were really laying the anti-Sun FUD on thick! Another meeting tomorrow - this is going to be so much FUN!!!

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Lou
Dead Vulture

Why??? Its the CUSTOMER base dummy!

Inspite of all the thing you mention the main reason would be to buy Sun's customer base and remove IBM's main UNIX competitor from the market and as a bonus, get hold of all the services opportunities on Sun kit which Sun was not able to monetize. Except for that they will probably slash and burn whatever Sun has to offer while cherry picking a few bits (can't think of any??) and write it off the rest in the normal loss of goodwill tax scam.

The Sun takeover of Storagetek was just that - for the customer base and teh tape technology - Storagetek had very little to offer except for rebadged stuff which Sun was selling anyway. And Sun bungled the customer base and as for the tape technology - well tape is so yesterday.

Hp tried to merge its two Unix lines after their Compac takeover and failed miserable, it chucked the Dec Alpha chip on that trash heap and lost any Alpha IP Compaq had. It did well out of the Proliants though.

IBM will probably do the same. It will be impossible to change direction on their P-series range chips, it would be stupid to create new competition by selling Sparc to Fujitsu. Solaris - they have AIX - which sucks but it is just an operating system and IBM is about the services - the technology is just a means to an end.

if this is true

- rest in peace Sun it will be boring when you are gone.

- Jonathan - I think you should buy that gondola and act out your fantasies - the ponytail would go fab with a gondoliers uniform - maybe you can steer that boat! And Opensource that!!

PS: Is it just me or does this once again proves that the share method of deciding a companies value pushes us further down aslippery slope - its all about the marketing, Stupid!!

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Eat A Bad Rat

We lose a lot of raptors and wild carnivores around here because people put out poison for pigeons and rats. Sun was always a brilliant scam; much like MSFT. Ten years ago I knew a couple of dozen people who worked for Sun; I told them all to sell their stock in 1999; none of them did, and none of them have jobs there anymore. IBM should be careful what carrion it feeds on. Perhaps Vulture Central could kindly offerThe Armonk Monster some expert advice?

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Flame

So much for eastern vision

Sad to see Fujitsu completely missing the boat...

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