What an IBM-Sun Deal Could Mean

From PC World: Well, I guess it's true: If an enterprise computing vendor lives long enough, IBM will claim it in the end. While I have tremendous respect for Sun, I've never quite been able to figure out how the company has survived this long.

I'd always guessed the company would eventually be sold off piece by piece. Surprisingly, IBM now appears ready to invest perhaps $4 billion in cash (once you take Sun's cash and marketable securities into account) to remove a competitor from the marketplace in a single swoop.

There is more to it than merely offing Sun, of course. Big Blue would also pick up some interesting, if overlapping, products and technologies in the deal. Some of them, as well as the people who created them, will doubtless improve IBM's product line. IBM also gets a significant server business, though at the cost of increasing the complexity of its already complex offerings.

My guess is IBM would, post merger, rapidly consolidate product lines and sack perhaps thousands of Sun workers. Those who stay might be happy to still have jobs, but not so happy to be working for IBM.

That the two companies culturally "come from different places" is an understatement of some magnitude. This could reduce the value of the engineering talent IBM gets in the deal, but in this economy where do even talented engineers run to when they're unhappy?

View: Article @ Source Site