IBM Walks Away From Talks Over Potential Sun Acquisition

IBM has withdrawn its $7 billion bid for Sun Microsystems today (Sunday), reports the NY Times, who confirmed the collapse of the talks based on a statement from an unnamed source while several other media, including the Wall Street Journal and ZDNet, were still speculating. The New York Times correctly points out this leaves Sun free to pursue other opportunities for selling itself.

Since last year, Sun executives had been meeting with potential buyers. I.B.M. stepped up, seeing an opportunity to add to its large software business, acquire valuable researchers and consolidate the market for larger, so-called server computers that corporations use in their data centers.

In their talks, I.B.M. and Sun had a contract to deal with each other exclusively. Now, Sun is free to pursue other suitors, including I.B.M. rivals like Hewlett-Packard and Cisco Systems. Cisco recently entered the market for server computers.

It will be interesting to watch the market react to this on Monday morning.

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One Comment

  1. Vincent Ray says:

    Seems appropriate for the the market to react negatively to this news. Sun hasn’t really been the best performer in the last year or so. Orders for their servers have been falling, and competition is rising both in the hardware space as well as software development space. At one point, there J2EE platform seemed to the technology of choice amongst enterprises. I don’t know if this is a true statement in today’s environment. With SaaS gaining traction, I think the bulk of server computing hardware will be purchased by a providers vs individual companies.

    Vincent Ray

    Service Management Link
    MHelpdesk, Service Management Software


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