For Sun it is no retreat; no surrender

Once Sun Microsystems asked to be shopped around by its investment bankers the writing was on the wall that the end is near.

Just this morning, Sun stock plunged as word came out that the proposed IBM/Sun deal was off. By asking to be acquired Sun put itself in a no retreat; no surrender strategy. Now that IBM has supposedly walked away, Sun is left with no suitors and a real possibility of being a lame duck manufacturer.

One thing customers want more than anything is a stable vendor to deal with. So if IBM

is really out then Sun CEO Jonathan Schwartz has to come out as soon as possible, come clean, and say Sun is no longer for sale and we are going to give it a go and believe we can be successful doing this and doing that. The longer he twists in the wind the more irrelevant Sun will become.

And, it is not impossible either. Ann Mulcahy of Xerox did it and I think her situation back 10 years ago was worse that Sun’s.

Sources say the main reason for the deal breakdown is that IBM’s offer price was too low at $9.40 per share or about $7 billion and Sun rejected the offer. Sure it is too low, but IBM is bidding by itself and Sun is desperate to sell. Did they think Big Blue’s acquisition team was made up of Bubba and Skeeter from Alabama? These folks are not dumb and they can smell blood. The offer price of $9.40 is probably the best they can get.

I can’t see anyone else but IBM wanting to buy Sun.

Sun has always been kind of a loner company. They conducted business in its own fashion. When IT vendors zigged; Sun zagged. They were the company that put the dot in They were innovators and they did not get swayed by Microsoft for many years.

Founder and long time CEO Scott McNealy was a maverick leader who knew how to shake things up and make things happen in the market place for Sun.

I will never forget him telling me, during an interview, that customers want Pontiac Bonnevilles not Ferraris referring to the Sparc processors compared to Intel. And, he was right. He provided the kind of equipment that was needed and made customers successful instead of asking them to follow the hype.

I can’t see this whole episode with IBM sitting well with McNealy. But, lets not forget this is a path Sun chose to take.

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Jim Love, Chief Content Officer, IT World Canada
Paolo Del Nibletto
Paolo Del Nibletto
Editor of Computer Dealer News, covering Canada's IT channel community.

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