| By Java News Desk |
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| March 19, 2009 06:30 AM EDT |
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Questions are flying around the Web in the wake of yesterday's reports that IBM is interested in buying Sun for $6.5BN. They include "Has Jonathan Schwartz finally found success?" (Therese Poletti) and "Why isn't Cisco buying Sun?" (Lawrence Walsh). We bring you here a brief round-up of what's being written around the Web about the possible deal:
"Why IBM Would Buy Sun Microsystems"
Steve Hamm, BusinessWeek
"IBM’s main challenge, if it buys Sun, will be to continue its steady march of profit margin improvements. IBM is a profit-focused company. Revenue growth is secondary for the company’s leaders and for analysts and investors. Hardware had 8% pre-tax profit margins, compared to 32% for software and 12.4% for services. So, if the Sun deal goes through, IBM’s margins will take a hit. It will be under the gun to make the deal pay off."
"IBM in Talks to Buy Sun in Bid to Add to Web Heft"
Matthew Karnitschnig, William M. Bulkely & Justin Scheck, Wall Street Journal
"If the deal does go through, which could happen as early as this week, IBM is likely to pay at least $6.5 billion in cash to acquire Sun, the people said. That would translate into a premium of more than 100% over Sun's closing price Tuesday."
Talks Heat Up Between Sun, IBM
Carl Gutierrez, Forbes.com
"Sun Microsystems' market value rose more than 80.0% following reports that it's in talks with International Business Machines to purchase the firm for as much as $8.2 billion. Despite being based on media reports - and without comment from either company - shares of Sun Microsystems rocketed 81.3%, or $4.06, to $9.03, in midday trading."
"Has Jonathan Schwartz finally found success?"
Therese Poletti, MarketWatch
"Simply put, IBM can take the best parts out of Sun, chuck the excess and kill the overlap between the two companies."
"Why isn't Cisco buying Sun?
Lawrence Walsh
"On paper, the IBM-Sun deal looks like a grab for market share. Sun is the fourth-place supplier of servers, with roughly 10 percent market share. IBM is the market leader, with 31 to 33 percent. Buying Sun would put it well out of reach of second-place supplier HP, which holds roughly a 30 percent share of the server market.
But what else would IBM get for its $6.5 billion? Storage? It already has that. Storage and systems management? Has that too. A database, since Sun owns MySQL? IBM already has DB2. Identity management and directories? Tivoli has plenty of that already. Processors? IBM already has the P5, which is akin to Sun's SPARC.
Perhaps the only thing IBM would get that's new is Java, the popular Web development platform. But is that worth the price of admission? Will that be a billion-dollar business?"
