Sun buys Cobalt Networks

Sun has announced its intention to acquire Cobalt Networks for $2bn, a move that will give it an important foothold in the entry-level server market, and Linux expertise.

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By  Mark Sutton Published  September 20, 2000

Sun has made an entrance into the server appliance market with the announcement that it has acquired server appliance developer Cobalt Networks.

The $2 billion all-paper deal gives Sun access to Cobalt’s range of entry-level server appliances, and to its Linux expertise.

The deal, which should be complete at the end of the year, will provide Sun with an import range of lower level servers to complement its existing mid and large-scale offerings. Cobalt’s range include easy to maintain, low-cost server solutions for businesses that are either at the entry level or require a large number of cost-effective servers, such as web hosts.

“Today we’re acquiring Cobalt to establish ourselves in low-end server appliances and immediately jump into the marketplace with a proven, world class product offering,” said Sun President and COO, Ed Zander. “This move is similar to our entry into the high-end server arena, which we did through our acquisition of Starfire server technology from Cray. We think demand for these high-volume, turnkey devices will explode in the next couple of years.”

The acquisition of a Linux supporter –Cobalt produces a number of Linux servers – also marks an important step for Sun in the open source community. Previously Sun had been present in open source only through its Star Office productivity suite.

Analysts welcomed the move, saying that if the two companies could merge cultures then Sun stood to gain important Linux expertise and a valuable market position through Cobalt’s product range.

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