IBM Looks to Buy Sun: Further Proof It's Darkest Just Before Dawn

by Ostatic Staff - Mar. 18, 2009

The Wall Street Journal is reporting that IBM is currently in talks to purchase Sun Microsystems. The acquisition is not a foregone conclusion, due in part to the very different corporate cultures in the companies. Some believe this tension will ultimately help both companies succeed, if they can just get through the talks.

The acquisition could take place as early as this week, and it is speculated that IBM could pay over $6.5 billion for Sun. Sun's recent financials have been more than a little disappointing, and this purchase would take a toll on IBM's profits in the short term. Business isn't solely about the short term, however, and I can't help but agree with the WSJ, CNet's Matt Asay, and at least a few of those involved in the talks that this acquisition would be a positive one for IBM, Sun, and open source in general.

While the WSJ article focuses on why this acquisition makes good sense strategically for IBM in the hardware spectrum -- enabling them to remain competitive with HP as well as new rivals in the server market, like Cisco -- Matt Asay believes the individual strengths of each company minimize their weaknesses, and the culture clash that (for now) puts the talks in peril is exactly what both companies need to get strong forward momentum in the open source software world.

To put it gently, Sun needs help. The WSJ reminds us that Sun reported a $209 million loss for the second quarter last December, and has had to cut its workforce drastically. Sun is responsible for -- and has the potential to continue innovating -- some great open source software (think OpenOffice, and MySQL). But for whatever reason (or perhaps several reasons), Sun isn't making the money it needs to sustain itself, its developers, or its forward progress. The nature of open source is such that even if Sun were to suddenly disappear, the code for these projects remains. I'm not sure that anyone really wants this to happen -- certainly not the employees whose lives are directly affected, nor the uncompensated communities behind these projects who'll need to stand up, dust off, and think about how best to move the project forward. It would be a giant backwards step, and at this juncture, nobody needs it, and few can afford it.

Asay's observation -- that Sun knows how to build software, and that IBM has a proven ability to market and sell its products -- sums up why Sun and IBM need each other. One party might need the other more -- but IBM wouldn't be in these talks and facing a dip in profits if there weren't a lot to gain. If the acquisition should happen, it isn't just Sun and IBM that will reap the benefits. It'll give the open source industry the steady footing to make those next forward steps.