OMEN
03-19-2009, 11:39 AM
Reported acquisition talks between server rivals raise questions about future of Sun technologies
A possible IBM acquisition of Sun Microsystems Inc. might have its good points. But users and analysts also have concerns that can be summed up in two words: uncertainty and fear.
Sun may be a diminished company these days, but it remains an influential one. Through its open-source products and the massive development communities that have been built up around them, Java and MySQL in particular, Sun has a pull that rivals those of companies with far larger and healthier balance sheets.
But with the reported acquisition talks between IBM and Sun, there are questions about what IBM might do with Sun's technologies, especially its open-source ones. For instance, the potential deal is getting mixed reviews from Java users.
In Philadelphia alone, the local Java user group has more than 1,200 members. David Fecak, founder and president of the decade-old user group, said one thing that the Java community likes about Sun's shepherding of the technology is the democratic process that is used to guide the direction of Java.
Fecak's immediate concern is whether IBM would continue to let the Java community operate, and thrive, as it does now. Or, he asked, will IBM move the decision-making process "underground" and take "the community process away from the community"?
Gordon Haff, an analyst at Illuminata Inc. in Nashua, N.H., sees an inherent conflict between Sun's open-source culture and what he thinks is IBM's continuing proprietary direction. Although IBM has been a supporter of Linux, its embrace of the open-source operating system "is in the context of what serves IBM," Haff said.
That tack is even more obvious in the database market, according to Haff. Buying Sun would give IBM the MySQL open-source database, which Sun acquired last year. But, Haff said, "IBM doesn't push open-source databases, they push DB2."
There are a range of possible motives for why IBM might want to acquire Sun. Such a deal could be a defensive maneuver against Cisco Systems Inc.'s decision to enter the server business and try to play a more prominent role in data centers, long the domain of companies like IBM, Sun and Hewlett-Packard Co. IBM also could be looking to bolster its ability to compete against Microsoft Corp. via technologies such as Linux and Java, and some observers think that MySQL would be an attraction for IBM.
And of course, Sun is still a major hardware vendor with a considerable installed base, even though the struggling company has bet its future on the success of its open-source strategy and its emerging cloud computing services. Sun's overall revenue dropped 11% in the quarter that ended in December, but the company still reported server sales of about $1.2 billion during that period.
Sun's line of servers based on its own Sparc processors and Solaris operating system could face an uncertain path under IBM, which sells systems built around its Power processors and AIX software that compete directly with the Sun machines.
Another consideration is the fact that the market shares of all the major Unix operating systems — AIX, Solaris and Hewlett-Packard Co.'s HP-UX — have been eroding in the face of competition from both Windows and Linux. But Unix systems continue to be embedded within many companies, often as the platform of choice for mission-critical applications and databases.
At this point, analysts and users such as Daniel Grim, executive director of networks and systems at the University of Delaware in Newark, can only speculate about what IBM might do with Sun's hardware lines.
Grim, a longtime Sun user, has been adding more Sparc systems to run the university's PeopleSoft applications, but he foresees a long-term shift away from that technology. On the other hand, Sun's x86-based hardware is appealing as a platform for Solaris: "We like the designs, and we like the price," Grim said, adding that Sun's offerings tend to be significantly less expensive than equivalent x86-based products from some of the other major server vendors.
One drawback is that some application vendors are quicker to support Linux than they are Solaris, Grim said. But bottom line, he isn't sure what an IBM takeover would mean — whether, for instance, he eventually would have to switch from Solaris to AIX.
IBM could shut down or try to sell off Sun's Sparc business, but it would risk losing the installed base of customers like Grim in the process. Deciding between Solaris and AIX is "a decision that IBM has to make" if it does buy Sun, said Vernon Turner, an analyst at market research firm IDC. "That's probably a difficult choice."
Bob Massengill, manager of technical services at Wake Forest University Baptist Medical Center in Winston-Salem, N.C., is a longtime user of the StorageTek storage products that Sun acquired in 2005, when it bought Storage Technology Corp. for $4.1 billion. Massengill said he thinks IBM might do away with the midrange storage devices from StorageTek that he uses in favor of its own products if the two companies agree to a deal.
IBM also might be getting damaged goods in the storage market. For instance, Massengill was critical of Sun's handling of the StorageTek acquisition, saying that customer service has suffered since then. "StorageTek did provide some of the best customer service of any vendor we worked with," he said. "All of that went away when Sun acquired StorageTek."
In addition to Sun's products, the corporate culture that it has fostered poses potential benefits — and challenges — for IBM.
"Sun is a company that has been based on and driven by the work of mavericks," said Charles King, an analyst at Pund-IT Inc. in Hayward, Calf. "I think it's critical for IBM to somehow maintain the culture of Sun in a way that preserves that history of innovation. It's one of the great things about Sun."
Sun's future "has been uncertain, and their financial performance uninspiring, for some time," said Rob Enderle, an independent analyst in San Jose. "IBM, on the other hand, has emerged as nearly invulnerable in this market, having shifted largely to a services and software model."
Enderle thinks that putting Sun under IBM's control would reassure existing customers and stabilize Sun's user base. And, he said, Sun's intellectual property holdings, in particular its software, "could significantly bolster IBM's portfolio for the battles for the cloud that are to come."
Compworld
A possible IBM acquisition of Sun Microsystems Inc. might have its good points. But users and analysts also have concerns that can be summed up in two words: uncertainty and fear.
Sun may be a diminished company these days, but it remains an influential one. Through its open-source products and the massive development communities that have been built up around them, Java and MySQL in particular, Sun has a pull that rivals those of companies with far larger and healthier balance sheets.
But with the reported acquisition talks between IBM and Sun, there are questions about what IBM might do with Sun's technologies, especially its open-source ones. For instance, the potential deal is getting mixed reviews from Java users.
In Philadelphia alone, the local Java user group has more than 1,200 members. David Fecak, founder and president of the decade-old user group, said one thing that the Java community likes about Sun's shepherding of the technology is the democratic process that is used to guide the direction of Java.
Fecak's immediate concern is whether IBM would continue to let the Java community operate, and thrive, as it does now. Or, he asked, will IBM move the decision-making process "underground" and take "the community process away from the community"?
Gordon Haff, an analyst at Illuminata Inc. in Nashua, N.H., sees an inherent conflict between Sun's open-source culture and what he thinks is IBM's continuing proprietary direction. Although IBM has been a supporter of Linux, its embrace of the open-source operating system "is in the context of what serves IBM," Haff said.
That tack is even more obvious in the database market, according to Haff. Buying Sun would give IBM the MySQL open-source database, which Sun acquired last year. But, Haff said, "IBM doesn't push open-source databases, they push DB2."
There are a range of possible motives for why IBM might want to acquire Sun. Such a deal could be a defensive maneuver against Cisco Systems Inc.'s decision to enter the server business and try to play a more prominent role in data centers, long the domain of companies like IBM, Sun and Hewlett-Packard Co. IBM also could be looking to bolster its ability to compete against Microsoft Corp. via technologies such as Linux and Java, and some observers think that MySQL would be an attraction for IBM.
And of course, Sun is still a major hardware vendor with a considerable installed base, even though the struggling company has bet its future on the success of its open-source strategy and its emerging cloud computing services. Sun's overall revenue dropped 11% in the quarter that ended in December, but the company still reported server sales of about $1.2 billion during that period.
Sun's line of servers based on its own Sparc processors and Solaris operating system could face an uncertain path under IBM, which sells systems built around its Power processors and AIX software that compete directly with the Sun machines.
Another consideration is the fact that the market shares of all the major Unix operating systems — AIX, Solaris and Hewlett-Packard Co.'s HP-UX — have been eroding in the face of competition from both Windows and Linux. But Unix systems continue to be embedded within many companies, often as the platform of choice for mission-critical applications and databases.
At this point, analysts and users such as Daniel Grim, executive director of networks and systems at the University of Delaware in Newark, can only speculate about what IBM might do with Sun's hardware lines.
Grim, a longtime Sun user, has been adding more Sparc systems to run the university's PeopleSoft applications, but he foresees a long-term shift away from that technology. On the other hand, Sun's x86-based hardware is appealing as a platform for Solaris: "We like the designs, and we like the price," Grim said, adding that Sun's offerings tend to be significantly less expensive than equivalent x86-based products from some of the other major server vendors.
One drawback is that some application vendors are quicker to support Linux than they are Solaris, Grim said. But bottom line, he isn't sure what an IBM takeover would mean — whether, for instance, he eventually would have to switch from Solaris to AIX.
IBM could shut down or try to sell off Sun's Sparc business, but it would risk losing the installed base of customers like Grim in the process. Deciding between Solaris and AIX is "a decision that IBM has to make" if it does buy Sun, said Vernon Turner, an analyst at market research firm IDC. "That's probably a difficult choice."
Bob Massengill, manager of technical services at Wake Forest University Baptist Medical Center in Winston-Salem, N.C., is a longtime user of the StorageTek storage products that Sun acquired in 2005, when it bought Storage Technology Corp. for $4.1 billion. Massengill said he thinks IBM might do away with the midrange storage devices from StorageTek that he uses in favor of its own products if the two companies agree to a deal.
IBM also might be getting damaged goods in the storage market. For instance, Massengill was critical of Sun's handling of the StorageTek acquisition, saying that customer service has suffered since then. "StorageTek did provide some of the best customer service of any vendor we worked with," he said. "All of that went away when Sun acquired StorageTek."
In addition to Sun's products, the corporate culture that it has fostered poses potential benefits — and challenges — for IBM.
"Sun is a company that has been based on and driven by the work of mavericks," said Charles King, an analyst at Pund-IT Inc. in Hayward, Calf. "I think it's critical for IBM to somehow maintain the culture of Sun in a way that preserves that history of innovation. It's one of the great things about Sun."
Sun's future "has been uncertain, and their financial performance uninspiring, for some time," said Rob Enderle, an independent analyst in San Jose. "IBM, on the other hand, has emerged as nearly invulnerable in this market, having shifted largely to a services and software model."
Enderle thinks that putting Sun under IBM's control would reassure existing customers and stabilize Sun's user base. And, he said, Sun's intellectual property holdings, in particular its software, "could significantly bolster IBM's portfolio for the battles for the cloud that are to come."
Compworld