Blue on Blue: IBM and Sun

A bit of surprise news, or rumour at least, with the Wall Street Journal claiming that IBM may buy Sun for upwards of $6.5 billion in cash

Tags: International Business Machines CorporationSun Microsystems Incorporation
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By  Mark Sutton Published  March 19, 2009

A bit of surprise news, or rumour at least, with the Wall Street Journal claiming that IBM may buy Sun for upwards of $6.5 billion in cash.

The report has drawn mixed reaction, but the analysts seem to be leaning towards deciding that the blue box server company might look like a good target for Big Blue, but a merger could end up closer to a friendly fire incident than a happy marriage.

There's a reasonable fit between the two in some key areas, and Sun would boost IBM's server market share considerably to around 40%, plus increase its presence in key verticals where Sun has strength like finance and telecoms. But there's also a big overlap in servers and other hardware like storage, and IBM would have to decide what to do with Sun's Sparc business and other hardware to create a clear proposition to customers.

The two are close on their embrace of open source, and Sun's Java and MySQL both have big developer communities and a lot of attractive IP, plus MySQL does some things that DB2 can't, but IBM would still face the challenge of making money out of true open source -  something Sun has struggled with - without alienating those communities.

Sun and IBM have both set out their ambitions for the cloud, and Sun would certainly bring a lot of talent to the table, but its merging the culture of West Coast Sun and the famously corporate IBM that throws another obstacle in the way of an easy merger.

Both companies are staying tight lipped about the reports, and typically both this and Sun's big cloud initiative happen one week after I had interviewed Sun CEO Jonathan Schwartz, but this one is well worth watching.

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