I.B.M. Withdraws $7 Billion Offer for Sun Microsystems

http://www.nytimes.com/2009/04/06/technology/business-computing/06blue.html?hp

by neilc • 17 years ago

85 28 17 years ago

nytimes.com

knightinblue• 17 years ago

Cisco is entering the market for server systems. Maybe they'll make an offer.

kiba• 17 years ago

For some reason I have a bad feeling for this if it goes through. Now that this offer is over, I feel relieved.

I supposed I rather have more companies than a few big fat companies.

andylei• 17 years ago

The offer isn't necessarily "over". Withdrawing the offer is probably a negotiating technique. Sun is trying to sell, and IBM is reminding Sun that it's probably the only interested buyer.

michaelneale• 17 years ago

Regardless of this offer, Sun will stop existing as it is now anyway, its inevitable. I don't like it either.

ensignavenger• 17 years ago

And I breath a sigh of relief!

rbanffy• 17 years ago

I will be delighted if Sun survives at all.

Still, I would love even more if Sun summons the will to bring back the desktop Unix workstation. The x86 world we live in is lethally boring.

krschultz• 17 years ago

So who is more likely to be a thriving independent business in 5 years, Yahoo or Sun? And which group of share holders will be more pissed off that the deal didn't go through?

I'm going to bet Yahoo will still be around and Sun's shareholders will be more angry.

zmimon• 17 years ago

IMHO, putting aside all technological and specific market considerations - now just seems a terrible time for any company to sell itself, if it can afford to do otherwise.

I honestly think even if Sun can just stay in limbo for another 5 years they are going to be able to sell themselves for far more when we are not in the throes of an economic meltdown than they can right now.

slackenerny• 17 years ago

Sun was borderline struggling for as long as I can remember, and to date survived anyways.

Once there were even tougher times for them and it was then when they developed Solaris 10 and the Niagara processor. Shareholders were pissed nevertheless and McNealy had to leave.

On top of that I hear Sun has some $2bn just in a bank right now. Back then they had two times that, but were two times bigger too (ca. 20000 employees).

Eliezer• 17 years ago

Of course! Yahoo and Sun should merge, and become Snafoo!

msie• 17 years ago

No! Apple and Sun. Then it could be S'napple!

TheJacka1• 17 years ago

All this over 5 cents?

bigbang• 17 years ago

I guess bid withdrawal is just a standard negotiation technique to piss the shareholders and force the board, like Yahoo/MS and I believe Oracle/BEA

seldo• 17 years ago

Yeah, this whole situation reeks of the Yahoo/MS deal -- lots of testosterone and people leaking negotiation status to see what it does to the stock price. Ugly.

The difference, of course, is that IBM doesn't really need Sun, it just sees a good company at a good price, or it thought it did.

astine• 17 years ago

That's 15 cents per share: millions of dollars.

marcus• 17 years ago

To be more precise, Sun has 744.71M shares issued, and 0.15$ per share comes to 111.7 Million USD

quisxt• 17 years ago

This feels like SGI 5 years ago :(

(except the Computer History Museum already has a nice home)

sutro• 17 years ago

If the deal does fall through, I doubt Schwartz can survive as CEO.

patrickg-zill• 17 years ago

I have to say I am relieved ... Sun needs to focus on three areas in addition to their hardware:

1. Java - already ubiquitous (ish), Sun gets money for support and software

2. OS and pieces of OS - Sun gives away Solaris, ZFS, MySQL etc., but in return they get support contracts and such

3. Storage (hardware and software) - Storagetek is still selling, and they have SAM-QFS, Honeycomb, and their flash-based iSCSI/CIFS/NFS stack

4. Hardware - Sell me a SPARC T1 or T2 system for under $1000 please, and get your volumes up and people familiar with their performance.

bitwize• 17 years ago

According to my sources, basically all of the truly cutting-edge fab techniques exist only at Intel factories. I don't think Intel is inclined to start manufacturing SPARCs under contract, meaning that x86 is the only CPU arch on the upper end of the power scale that can be manufactured cheaply enough to meet the price point you want.

e4m• 17 years ago

Point number two... why not switch to FreeBSD/OpenBSD and drop Solaris? Sun could save a ton of money and still do what they have historically done. Instead of writing and maintaining their own OS 100%, take care of 20% of a good, free operating system that allows this sort of modification in commercial environments. It worked for Apple in OSX.

notaddicted• 17 years ago

I find this failure and the failure of Yahoo deal with Microsoft to reflect poorly on the tech industry.

In both cases it is culture/innuendo getting in the way of making a practical deal. The us vs. them group conflict mentality. Also unreason. This type of luxurious thinking will be beaten out of the industry by competition eventually.

numair• 17 years ago

Sun is slowly but surely putting together a strategy to offer a private-label alternative to Amazon's cloud - and the only offering that I find particularly interesting. If IBM withdraws for this deal, I hope they try to placate shareholders by providing an in-depth overview of how this strategy can create significantly more value than $7 billion. Hopefully Sun starts to get really aggressive about this, and even moves into offering a consumer-facing version -- when coupled with the fact that the very creators of MySQL, ZFS, etc are at their company, they are pretty much the only ones able to offer Amazon a run for their money at the moment (something public investors seem to fail to understand).

If the stock dips significantly on this news, wouldn't be too bad of a buying opportunity. There is clear intrinsic value in Sun's support contracts and assets that is being significantly undervalued by the market. That's my take, anyway.

neilc• 17 years ago

the very creators of MySQL, ZFS, etc are at their company

The creators of MySQL used to be at their company, anyway.

they are pretty much the only ones able to offer Amazon a run for their money at the moment

I'm not so sure; IBM, Microsoft, and Google all have the technology and the personnel to be a pretty compelling alternative to AWS, although they've failed to deliver so far. What does Sun have that any of these companies don't?

wmf• 17 years ago

Are you forgetting vCloud? VMware's technology is much more mature than Amazon's or Sun's.

I.B.M. Withdraws $7 Billion Offer for Sun Microsystems

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