OStatic

Is there any chance that virtualization giant VMware might have its eyes on Red Hat as an acquisition? This article reports that VMware CEO Diane Greene, ousted by her board in July, had set up meetings with Red Hat in part to position VMware as friendly to open source and possibly as a prelude to a buyout discussion, according to a person familiar with the conversations. While both companies have declined to comment, the prospect could make a lot of sense for VMware for several reasons. Here's why.

Sun Microsystems, which is betting much of its future on open source, just reported its fourth-quarter numbers, and they were not rosy. The company's profit dipped 73 percent, year over year, for the fiscal quarter ended June 30th. Some observers are blaming the drop in profit on slumping revenues, but revenues were $3.78 billion, down only 1.4 percent from a year ago, and the company has continued with cost-cutting measures as the economy underperforms. The real reason for the slump in profits is that Sun has faced heavy competition from IBM and Hewlett-Packard in the high margin server market. Still, Sun maintains that its many open source initiatives will lead it toward brighter days.