Sun’s business has seen better times, but the company’s server, storage, virtualization, software and now cloud computing technologies could go far in helping IBM increase its share of the world’s IT Market.
The word bird is that IBM could start bidding at $6.5 billion for Sun Microsystems. Here are a couple reasons why Sun should up the ante…
1) Sun has been building out a nice “on demand” computing model that would fit well with IBM’s long sought build out in that space. Sun is expected to be announcing even more advances in its cloud computing initiatives that could increase its value in of itself
2) Virtualization remainds a key to the industry’s growth and short of buying Citrix, VMware or Microsoft, acquiring Sun provides the best opportunity for IBM to turbo charge its virtualization efforts and to compete against the folks in Redmond.
3) One of the biggest threats to IBM’s database software business is the ubiquitous MySQL which Sun owns and sponsors.
4) If Sun has survived as an independent company for this long, its seen its worst.
5) Sun has been working hard to engage the open source community. Mixed results at times but there has been indications that Solaris and OpenSolaris could be about to break out. There have been rumors that a significant number of notebooks preloaded with OpenSolaris to very technical users. That indicates strong potential for operating system technology that Sun has been very careful to nurture and grow in the face of many obstacles.
6) Java: Love it or hate it its still in everyones face after more then a decade. For IBM which has had Nobel Prize winners on its research staff, the potential to fix Java’s problems and make it a market force once again makes the technology incredibly and possibly increasingly valuable
7) IBM Chairman & CEO Sam Palmisano once famously said he was tired of ex-IBM’ers at EMC “kicking sand in our face” when it comes to the storage market. Years later he must be still tired because IBM has made very little progress in that space. Teaming up with Sun may really change his chances.
Sun’s install base goes way back to the beginning of the industry and could mean big bucks to IBM Global Services. The opportunity to set foot in data centers that Sun has spent decades cultivating should be worth a mint to IBM…
9) Hardware has been a laggard for IBM and last year contributed to 9% of the companies profits while software and services were 40%. It is not a trend they can see continue; by buying Sun and eliminating redundancies, IBM can inject some profitable growth into its hardware business for longer term stability.
10) Even things as simple as Sun’s URL lineup could deliver nice value to IBM (sun.com and network.com are the biggest ones)
The folks at Sun could squeeze an awful lot more out of IBM if they try.
Well not anymore.. Shares of Sun Microsystems Inc fell more then more then 23% on Monday on news that IBM will pull the offer this weekend and Sun ended IBM’s status as its exclusive negociating partner. It is unclear if talks are continuing or if Sun was trying to find an alternative suitor to IBM.
IBM was discussing a price of more then $9 per share for Sun. Which is about twice the share price of the Santa Clara based server and software maker when the news of the discussions leaked last month.
IBM was discussing a price of more than $9 per share for Sun. But as investors reacted to the breakdown in talks, they sent Sun shares down $1.99, or 23.4 percent, to $6.50 in morning trading Monday. IBM shares fell $1.60 to $100.62.
Cisco has pretty much declared war on H-P and IBM and H-P and IBM want to come back and get into Cisco’s key markets and that the ethernet space which is a $20 billion market opportunity every year. Brocade will most likely gain share as a result of this rivalry. 
