back to article IBM-Sun deal breaking down, report says

According to spokespeople for the two companies a report on Sunday evening in the Wall Street Journal, the much-rumored and never-admitted merger talks between IBM and Sun Microsystems appear to have hit an impasse. No kidding. Huh. The report posted on Sunday said that Sun's board of directors had rejected a "formal …


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  1. Anonymous Coward
    Anonymous Coward

    Toxic Asset

    It's going to take a big company to absorb something like Sun which has good IP but also is part toxic asset.

  2. Kevin Hutchinson
    Thumb Down

    Sun is screwed

    Oh man, how I wish I didn't buy those JAVA shares at $8.40 last week. This news will send the shares into the ground, and send customers running to other vendors. As a long-time Sun fan boy, the reality has finally hit me: here is a company that says "the Network is the computer" but that STILL hasn't got a public cloud offering on sale, a company that believes in "throughput-computing" but doesn't update it's Niagara processors each year, a company that believes in Open Source, yet gets slammed by Apache and Linux for being closed, and ultimately a company that simply can't sell. c.f. Amazon.

  3. Medium Dave

    Déjà Hoo!...

    ...(noun): The feeling you seen this before, possibly involving Microsoft.

  4. Anonymous Coward
    Anonymous Coward

    What a shame...

    ...that one so intelligent, so pretty, so beautifully eccentric, so original, could become so desperate for the ogling, pawing attention of their shallow, single-minded, suitors that they would create for themselves a vision of beauty that is so ugly and dissonant and, in their push to fit themselves into that vision, would distort themselves so horribly.

    Binging. Purging. Nipping. Tucking. Horrifying those who care about them with how little they seem to care about themselves.

    And then to end up alone.

  5. joe


    Let SUN die properly and not at the hands of the blue axe murder

    Nuff said...

    Happy SUN customer can now go to bed to dream of Apple coming to the rescue

  6. WinHatter

    M$-Yahoo only different

    The Bride does not want it, just because she thinks she's prettier than $9.4 a share. Well that is unlikely Cisco or HP steps in.

    The only potential suitor is IBM for HW and WebSphere purposes . Sun should have acquired EDS to get some sort of "Services" to cash-in on their "open" things ...

    So now IBM will be able to drive Sun out of business by pushing its gear at a discount until the initially provisioned $6-7bn run out. IBM has a bit of a bottom soreness called Oracle and getting the upper hand on the Java spec won't hurt.

    Unless the Bride finally decide to say "I do". And as usual I think they'll just take the monies from the ongoing contracts, push their gear and kill off completely Sun things and I very much doubt IBM will ever give the non open bits to the open community.

  7. amanfromMars Silver badge

    Priceless Merchandise doesn't allow you to Screw the Goods ...

    ....only to Miss the Prize with a Constant Longing and Destructive Ache for their Undoubted Hidden Pleasures.

    "That's not to say that Sun isn't screwed, particularly after all the merger talks and IBM's having seen, er, all the goods."

    To continue and expand upon the very apt XSSXXXXual metaphor, and to present a Positive Yin to the Negative Yang of the Tale, it is not Sun being spurned for goods which may have been discovered/uncovered/displayed,..... for of course, Greater Value is never in what is, but always ready with what can be, ...... and therefore it is much more likely to be the case that the suitor disappointed in the performance stakes and wasn't well enough equipped to deliver what is needed for the Passionate Driver, Mutual Satisfaction which Guarantees Climactic Successes and the Perfect LoveChild...... Immaculate Progeny.......which in Network InterNetworking Javan Applications would be ITs Prodigal ProgramMING. And that aint delivered in a Business Suit Operation, it comes from the Hearts of Freed Slaves and the Minds of Virgin Souls and Thoughts Shared with Free Spirits to Vanquish Surrender and Vantage Submission with Total Information Awareness 42 Lead Future Knowledge as IT Follows Sources of /to/from/in/ True Tales ........ Network InterNetworking Java Applications ProgramMING in CompleXXXX Covering Cloud Configurations for CyberSpace Comments to Command and Control with ZerodDay Play Stations.

    A little something for the Genre of Hideo Kojima and King Lud IC, ..... in Order to Abolish Chaos and Stupidity Through Great Game Designs ..... ?

    This Google Venture was brought to by ........ GCHQ, Seventh Heaven AIdDVision......... and not to be Easily Confused with the Lesser Spotted Cuckold in a Doughnut Do Virtually Naught Variety of Searching Steam and Stream Engine, which is nothing more than and really just a Glorified Self-Serving Muck Filter occasionally Running amock as Leading Headless Chicken ....... and just as Useful at they can be.

  8. Anonymous Coward
    Thumb Down

    Please define "Confidential"

    "That's not to say that Sun isn't screwed, particularly after all the merger talks and IBM's having seen, er, all the goods."

    And? So IBM's legal team are privy to company confidential information; are you saying that IBM might leave itself open to lawsuits in the future?

    Patently (sic) , someone doesn't understand the meaning of "confidential"

  9. Anonymous Coward
    Thumb Down

    Time for pony tail to fall on his sword

    JS 's position is surely now untenable. He's tried to flog a company that he has almost run into the ground. Sun are still a great company, why on earth would you sell it to IBM to that they can dismember it. It's maybe time to think about hiving off the non profitable parts, selling other bits where necessary. They now need a CEO who can take a fresh look at Sun and decide what is best. Start marketing the fantastic x86 systems and 7000 storage properly for a start.

    AC because I work for a Sun partner.

    Oh, and ding ding Matt.

  10. Nomen Publicus

    Google a better partner

    I've no idea why IBM wanted Sun, it already has equivalent products to Sun in almost all areas.

    Google however needs cheap high-performance low-power servers that can be rapidly deployed. Exactly what the new SPARC based servers can provide.

  11. Osvaldo


    Best news in a long time. BTW, if the market drops JAVA shares back to $3-4 like before the IBM rumors, it's just proof that the market is stupid - IBM says Sun was worth the double, so it is worth the double - and it would be worth much more (on the merits of its current portfolio, revenues and long-term strategy) without the current recession. Remember guys, the stock market valuation is all about making a cents over the next 24h or little longer than that; it's not about the real value of anything.

    Now if somebody else (like Cisco or Google) would step in to buy Sun, I don't see much problem. But IBM would be the kiss of death (one way or another) to far too many great Sun techs.

    @Kevin Hutchinson: See Yes, it's just recently launched (actual deployment apparently open in beta stage), they're almost late in this market, but they are there and the offering seems great.

  12. Anonymous Coward

    Reality restored

    With all the toy money floating around - RBS buying ABN AMRO and all that - until everyone realised what a charade it all was, you'd think the M&A fetishists would return to their closet and lick each other's wounds for a while. "IBM plus Sun, pant, pant!" Sheesh! Just because it's possible doesn't make it a good idea.

  13. Anonymous Coward

    For the glory of the day...

    ... I just ordered 8 T5120's today.

  14. Anonymous Coward
    Thumb Up

    @ Osvaldo re: Sun Cloud

    Agreed, it does look really good, and I'm more inclined to seriously look at this given Sun's pedigree in healthcare/government/military. There is just something icky about using a search provider or online book store's cloud service for anything remotely serious.

  15. Anonymous Coward


    Only Southern Asset Management is forcing the sale of Sun. As Sun has been said before, it has more than enough cash to weather the current economy crisis. All it needs is sufficient layoffs to get it back in the black and making profit again. Everyone knows Sun has way too many management layers which is why their costs are so high. They just need to pull their finger out and fix it.

  16. Anonymous Coward
    Paris Hilton

    Pony Tail & Sword Falling

    Get the feeling Pony Boy is still trying to steer Sun towards his long term strategy, at complete odds and defiance with the board and the majority shareholders, who want a quick sale to minimise their loss of investment. Of all the missed opportunities, the biggest was Sun's failure to buy it's own shares at $3.50 and go private, slim down to ride out current climate without hindrance from greedy investors, carry on innovating turning the industry on its head, and finally reap the financial harvest of the current mass adoption of its key products in the 3-10 year timeframe.

    Paris - because she would never screw Sun like the investors have done

  17. Anonymous Coward
    Anonymous Coward


    Who exactly is going to want to buy SUN kit now that SUN doesn't even believe they have a future?

    Give it some time and SUN they will be begging IBM to buy them for half current offer (assuming someone else doesn't snap them up in the meantime).

  18. Michael Friesen
    Paris Hilton

    @Nomen Publicus - Equivalent products to Sun?

    I disagree that IBM has any products "equivalent to Sun", except perhaps in storage. What is has is abysmally-designed products that boast competitive specs. No elegance of design; no foresight in execution; no flexibility for the hardware architect -- just ugly limitations that favor clunky implementation... Hardware designed by a committee for sale to Suits.

    In automotive terms... I'd suggest that IBM is a Ford F150 pickup truck: Plebian, expensive, hell to repair, lousy on gas, and the wrong vehicle for most of the people who buy it.


    (( Lacking a back seat, Paris would never buy a Ford F150. Wait, I mean, the Ford's lacking a back seat... ))

  19. Anonymous Coward
    Anonymous Coward

    Sunset ... sunrise

    Someone remind me: when was it IBM were reporting some of the biggest losses in corporate history, before reinventing itself as - primarily - a services company?

    Looking for a comparable profile in Sun's fortunes. Especially now this ill-fitting, competition-strangling proposal appears to have gone away.

  20. zvonr
    Paris Hilton

    Who knows, maybe somebody else will make a better offer

    I would have been quite surprised if somebody else would have not made a bid at least to make things more expensive to IBM. (like Garmin did to Tom Tom). IBM and Sun merging would have changed the market significantly ....

    SEM bought Sun in average for more than 12$ a share.. I doubt they would like a 9.5$ a share unless Suns last quarter numbers are horrible(quite likely) ...

    I would like an official statement ... all this rumors are definitely not good for Sun..or maybe they were done on purpose to attract another bid? ....

  21. Ian Michael Gumby

    It aint over yet...

    There are a couple of issues.

    1) IBM wants to negotiate in exclusivity. Sun doesn't want this because it gives to much power for IBM to dictate the price and then puts Sun in a take it or leave it position. Sun wants other bids because it will potentially increase Sun's purchase price.

    2) IBM needs Sun more than people think.

    A) IBM would have control over Java and a larger influence over the next decade of development tools.

    B) IBM needs to crack their 'white space' problem. In SWG, Informix (IDS) is their only leverage. In the 'white space', you have BEA and Apache competing with Websphere. ?Lotus? LOL... won't even go there. So Sun plays where IBM doesn't and IBM has pretty much maxed out their own customer base.

    C) Sun's IP. Sun hasn't learned how to monetize their software and hasn't exploited their position as an IP industry leader to post great services revenue numbers. IBM can. So the marriage would work, and potentially work well.

    IBM has to hurdle EU's regulatory concerns. IBM also currently has a very black eye because while they have posted record revenue numbers, they're also job shifting from the US to India and elsewhere. IBM also has been caught with their hand in the proverbial cookie jar. With their latest 'patent gaff', it calls to question their accounting practices. Are they using the offshore model to cheat the US government out of their fair share of taxes? (Would the IRS consider it a tax dodge when they're selling their off shoring model as a way to reduce tax liabilities? Are they playing footloose and fancy with their revenue recognition? Say it ain't so. ;-)

    So for IBM to sustain their growth, they need Sun.

    What we're seeing is a game of chicken. Who's going to blink first?

    BTW, if Schwartz had a brain, and McNealy for that matter, they could actually turn stuff around without being acquired. The HP/Oracle deal isn't a good one and there has to be other bidders, or Oracle would have to step up to the plate and buy the whole company and keep it intact.

    But what do I know? I'm just an alias posting my dumb ass opinion on a UK electronic news site. :-P

  22. Anonymous Coward
    Anonymous Coward


    *SUN* knows it has a future, *Schwartz* doesn't believe it, and wants to make a fast buck with hs cronies in Southeastern Asset Management. I'd guess that's why McNealy is part of the "don't sell to IBM" faction on Sun's board. He must be regretting hiring Schwartz even more, now. Go Scott!

  23. Anonymous Coward

    IBM should.....

    Buy Sun and leave them as a subsidiary called HAL.

    Ahhh, the memories.........Too bad FJ killed that one.

    Just like Amdahl.

    Some please stop the ride, I wanna get off now, I'm feeling a bit nauscous...

    AC 'cuz anybody that knows me will recognize me by my comment......

  24. Oninoshiko
    Thumb Down

    Re: IBM should.....

    HAL communications Corporation in Urbana, Illinois might have a problem with that.

    I don't have the date they were founded, but I know they have been there since the mid-80s, at least.

  25. Ian Michael Gumby


    Garmin? TomTom?

    You must be talking about Garmin trying to put a last minute bid on TeleAtlas. Totally different situation.

    TomTom and TeleAtlas had announced a deal. Nokia was then going to purchase Navteq. Garmin? They'd be left out in the cold since Nokia and Garmin could be considered competitors as there's a convergence between mobile phones / PDAs / and Nav Units.

    Since the deal didn't happen, Garmin signed a long term deal with Navteq.

    BTW, if you checked on all those stories about idiots who blindly followed their GPS devices, you'd find out that the bulk of them used teleAtlas' map data. ;-)

  26. Anonymous Coward

    Re: IBM should.....

    Interesting. They should sue FJ.

    I wonder if they're hiring? I'd like to move back to Illinois.

    Where's the fork sign? I wanna put one in it......

  27. Matt Bryant Silver badge

    Last gasp of the Sunshiners?

    Where to start?

    ".....Oh, and ding ding Matt." Well, I knew things were bad for you Sunshiners, but surely you haven't been driven to working on the buses already?

    "....I've no idea why IBM wanted Sun, it already has equivalent products to Sun in almost all areas...." How many times do you deluded fools need to be told? They don't want the Sun products, they want the installed SPARC base. Nobody wants the Sun hardware business in any form, and they only want parts of the software business. The big prize is all those customers that are now going to have to migrate off SPARC. All the other vendors are lining up to feast on that installed base when Sun dies, it's likely to be a key and possibly only growth area in the next few years, and IBM are trying to jump the gun and buy it up. Get over your bias - the customers don't want the stuff, otherwise Sun would be selling more, making a profit and not needing to hawk itself around.

    "....Google however needs cheap high-performance low-power servers that can be rapidly deployed. Exactly what the new SPARC based servers can provide." Mentioning the words "cheap" and "SPARC" in the same paragraph will instantly discredit you in any real technical circle. Unless it's along the lines of; "Why don't we replace all those expensive, high-maintenance SPARC systems with cheap xSeries/ProLiants/PowerEdge servers running Red Hat, and enjoy the better performance and management tools?"

    "....Now if somebody else (like Cisco or Google) would step in to buy Sun, I don't see much problem...." Get a clue! CISCO are busy betting the house on California and FCOE. Why on Earth would they want to lumber themselves with the profits equivalent of a black hole? And as for Google, they are a software company, and none of it is Slowaris software. They don't do hardware. Even if Google decided they just wanted to blow $10-odd-bn, expect a post-purchase dismemberment as all the hardware is sold off that would make the IBM deal look like paradise. You Sunshiners sound silly when you go on about Apple buying Sun, when you can't supply one viable motive for such a purchase, so how can you make the leap to companies that don't even operate in the same markets? What is this game - name any company that has lots of money and makes something vaguely alligned with IT as a Sun "partner", then start fantasising about a future where Sun takes over the World without making any changes? Wake up! Sun is on deathrow, IBM can afford to play these games because there are no other suitors. Sun has been hawking itself for over a year, if there wasn't any other companies interested in the last year before the crash, why do you clowns think they'll suddenly change their minds in a recession?

    And now we come to the perfect example of EXACTLY what is wrong with Sun, courtesy of Michael Friesen:

    "....What is has is abysmally-designed products that boast competitive specs. No elegance of design; no foresight in execution; no flexibility for the hardware architect -- just ugly limitations that favor clunky implementation... Hardware designed by a committee for sale to Suits...." It is those "suits" that run the businesses. They have business requirements, they buy IT hardware and software to meet that requirement. Their only interest is in gaining a competitive edge over their competitors by completing those business processes as fast, cheaply and reliably as possible. They couldn't give two figs about "elegence of design" - if a ZX Spectrum running BASIC was the option that did the job reliably for the cheapest cost then it would be the top seller. Sun hasn't met the criteria of the "men in suits" for a long time, which is why they are dying. Pretending that it is all because those suits "can't see the beauty of Sun's vision" is just childish petulance.

    ".....In automotive terms... I'd suggest that IBM is a Ford F150 pickup truck: Plebian, expensive, hell to repair, lousy on gas, and the wrong vehicle for most of the people who buy it." Get out of your ivory tower and see the real World. Niagara is like trying to sell sixteen roped-together SMART cars to someone that wants a Transit van. And you have to buy sixteen SMART cars, whether you need them all or not. UltraSPARC is like trying to sell the same customer a 1980s Transit van. SPARC64 is better, but it's more like a Chinese copy of a Transit - it just seems dated, able to do the job but just not got that "new" feeling, whilst the Xeon, Itanium and Power - even Opteron - just look years more modern and with more of a future.

    It is the faulire of Sun and their salesteams to convince those "men in suits" that their products and strategies are right that has killed Sun. And Sun has managed to do this from a position of complete dominance. At the end of the day, you can't say that IBM, Dell or hp salesgrunts are in some way massively better sellers (believe me, they're not!), it's because they had better products to take to market, across a much larger range. What made the difference is IBM, Dell and hp LISTENED to what the men in suits actually WANTED - reliable, powerful solutions that integrated, with good management tools and support for the popular applications. Sun were too busy thining that everyone was just so gosh-darn lucky to have them around to realise how far off the right track they were heading.

    /chuckling whilst shaking my head in disbelief.

  28. Anonymous Coward
    Anonymous Coward


    > chuckling whilst shaking my head in disbelief

    Funny, that seems to be most peoples' reactions to your posts :)

    Y'all have a nice Sunny day now, y'hear.

  29. Matt Bryant Silver badge

    RE: @MattB

    Yeah, well I hope I do spread some cheer amongst all those Sunshiners waiting on their pink slips.

  30. Anonymous Coward
    Anonymous Coward


    So Matt, you take pleasure from thousands of people losing their jobs... how nice. I certainly hope I never have the displeasure of working with you

  31. Matt Bryant Silver badge

    RE: Dave Moreton

    "So Matt, you take pleasure from thousands of people losing their jobs... how nice....." Grow a thicker skin and stop blubbing. I've been made redundant more than once, all you can do is get out there again and find another job. With experience you get a lot better at spotting the warning signals in time, and setting up those escape routes. There have been years of warning as to exactly where Sun was heading, so any Sunshiner that hasn't figured it out by now must surely have had their head doubly deep in the sand. Those with real skills will be fine - those without were probably on their manager's list for redundancy anyway.

    "....I certainly hope I never have the displeasure of working with you" Careful what you wish for! If you're one of the Sunshiners up for the chop then you wouldn't want to turn down a nicely paid job with a company that's not red-lining just because you got all huffy. Mind you, we do look for a sense of humour, so you probably needn't bother applying.

  32. Anonymous Coward
    Anonymous Coward

    Sun Field Engineers - Jobs Lost

    Sun Microsystems UK, this morning 14 April, held a hurried conference call with its staff to inform them that approximately 150 UK Sun Field Engineers would be outsourced to a third party company within the next 2 months.

    In this shock announcement,Tony Church, Director of UK Services, disclosed that they had invited several companies in a request to tender, and were now in negotiations with these specialist Pan European service companies with a view to outsourcing their whole field service organisation. He informed staff that this was a cost cutting exercise.

    Only last week the UK Service Group were congratulated by management for being the highest performing country in Europe and were thanked for their loyalty and commitment.

    Many of Sun's customers will be very concerned at the prospect of this move, as it means non Sun employees being given access to premises and data centres in areas of very sensitive data and confidentiality, i.e., Banks, Government Agencies, etc,etc. These corporations will be very concerned about this downgrading of service quality and site visits from Non-Sun employed service personnel.

    A very sad day for the Sun Services Group.

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