Sun + IBM: Economics Making the Impossible Possible - Page 2

Rob Enderle

Other Buyers?


Four other parties could be interested in Sun.


HP, which would rather IBM not get the customer base that now belongs to Sun, would likely have the most difficult time justifying the acquisition because much of the value is in software, and that currently is counter-strategic to HP in that much of that is positioned against Microsoft (a close HP partner).


Microsoft has the resources and probably is even more interested in keeping Sun out of IBM's hands, but doing an acquisition like this would be difficult to get through regulatory approval and it clearly doesn't want the hardware.


Lenovo would really like to have the channel and market presence that Sun still has in the world. It wants to develop a server business and this would be one of the fastest ways. However, it hasn't been able to move quickly enough on opportunities like this in the past and appeared to be at least a year off from being ready to take on something of this size.


HP and Microsoft: A joint acquisition between HP and Microsoft could be very interesting, but nasty to execute. In this case, Microsoft would block IBM and access to the IP, while HP would get the products and customer base. If the separation were done right, regulatory approval is much more likely than with a Microsoft solo bid.


Doing the Merger


This merger, regardless of who does it, will have the problem of acquiring an employee base that has been pounded through sequential layoffs over the years and likely has no great confidence in management, any management, as a result. On the other hand, if many of these folks could have found other jobs, they would have. The areas to keep are those that are customer facing, or anyone tied directly to the technology that the acquiring company wants. Everyone else is at risk and likely will both know that very quickly and not be particularly happy about it. The merger will need to be executed incredibly quickly, otherwise employee problems could escalate to unacceptable levels and damage the acquiring company. Given the arms' length issues surrounding making the legal parts of this merger come about, doing a merger like this fast enough is problematic.


Wrapping Up: Final Thoughts and Recommendations


This showcases Sam Palmisano's excellent execution as much as anything. The fact that IBM can even think of doing this and was able to move on the opportunity so quickly showcases the changes he has brought about and the improvements he has made.


Sun customers: You have two choices. Either freeze your Sun (hardware) purchase projects until this settles or renegotiate them, taking into account the very real risk that this same hardware will become much less expensive after the acquisition until any inventory is used up. Support shouldn't be an issue -- it's avoiding the impression that had you waited you could have either negotiated a better deal or should have bought a different vendor's product. This is a time when folks tend to be a bit unforgiving of seemingly bad financial decisions, so cover your backside, as this class of hardware isn't cheap.

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Mar 19, 2009 8:10 AM Anonymous Insider Anonymous Insider  says: in response to Jim Federline

IBM might want to acquire Sun Microsystems for protection if...

... a significant amount of source code and procedures from Solaris 8 were used to enhance Linux scalability features.

... a jury in the near future validates the Novell SCO Amendment to Asset Purchase Agreement from October 16 1996 in a way it benefits SCO in regard to Unix copyrights and patents.

Then IBM loses the right to distribute AIX.

However, if by the time the jury validates the APA IBM owns Sun Microsystems, IBM could still use Solaris to replace AIX.

Mar 19, 2009 8:54 AM Anonymous Insider Anonymous Insider  says:

Why Would IBM Want Sun?

These IBM-Sun talks might be just noise to distract public attention from IBM's upcoming quarter report. Are there more massive layoffs coming for IBM soon? We'll know pretty soon...

Nevertheless, how did Linux obtain scalability features in the early 2000s? Enter Sun Microsystems.

In the late 90s and early 2000s, there was lack of knowledge among Linux kernel developers on how to provide Linux with things like task scheduling, virtual memory management (VM), communication device drivers, TCP/IP, storage device drivers, web server, kernel locking, kernel preemptibility (SMP only), buffer cache management, IPC (semaphores, shared memory, message queues, and pipes). [1]

This lack of knowledge was partially confirmed by Linus Torvalds when he wrote in early 1999:

"Does anybody know semaphores by heart? I've got code that may well work, but the race conditions for semaphores are nasty... Anybody? Semaphore theory used to be really popular at Universities..." [2]

Then, in 2000, Sun Microsystems announced the release of Solaris 8 source code. Sun made Solaris 8 source code easily available on the Web. [3] [4]

In the years 2001, 2002, and 2003, Linux obtained the much needed scalability features.

Where did Linux developers obtain the code to do so? Well, Solaris 8 source code was easily available on the Web.

A timeline on Unix source code availability is found at this link.

If the above did occur, Sun Microsystems is a much needed acquisition by IBM. Similar to IBM's need in the late 90s to acquire Sequent.

[1] Link (PDF document, page 27)

[2] Link

[3] Link

[4] Link

Mar 19, 2009 9:38 AM Anonymous Insider Anonymous Insider  says: in response to Jim Federline

Among the applications IBM will obtain with Sun's acquisition is the only viable replacement for Microsoft office in Linux: OpenOffice.

You already mentioned MySQL, the most popular database for Web applications.

So if the IBM - Sun talks aren't noise, Sun's acquisition is a pretty strategic move by IBM.

Nevertheless, I think the acquisition won't be an easy one for IBM. Sun knows the value of its products...

IBM needs to take into account a possible SCO settlement as well.

Mar 19, 2009 6:14 PM Jim Federline Jim Federline  says:

Anonymous-Insider - A lot of what you say makes sense and is factually true. But please connect the lengthy Sun-and-Linux historical accounting with IBM's need to buy Sun. I can see some other software connections to build more services revenue, such as expansion of DB market (MySQL) and ubiquitous programming platform (Java), but the whole OS connection (Linux or Solaris) seems like a boring commodity trader's domain. I just don't see it.

Mar 26, 2009 10:01 AM Anonymous Insider Anonymous Insider  says: in response to Anonymous Insider

I enjoyed the way you wrote about the Solaris-Linux connection: "There is some speculation that Solaris is the source of many of the core components in the current generations of Linux, and that IBM's acquisition could prevent another SCO event in the future, should someone less friendly acquire Sun instead."

Here's a better timeline of Solaris 8 source code availability:

Sun to make Solaris code available More More More

Solaris 8 source code left open More More - Program Overview FAQ E-mail

Sun re-thinking source code giveaway

Sun Unveils Solaris 8 OE Source Code More - Program FAQ Package Process License

Sun set to end Solaris download program

Sun Continues to Offer Free Solaris and Foundation Source Downloads More

Does Solaris source license interfere with Linux contributions?

Solaris 8/9 Source Code?

Ps. I told you about IBM's new layoffs. IBM should have kept the talks with Sun more low key. It's not nice for the new layoff workers to know IBM apparently has the money to get Sun but not to protect US jobs. IBM needs better PR indeed!

Mar 26, 2009 10:56 AM Anonymous Insider Anonymous Insider  says: in response to Anonymous Insider

A teaser from Linus Torvald's himself: "Most of the inspiration early on came from Sun OS which was what I was using at the university at the time..." (fast forward to minute 4:48 in the following video)

Revolution OS: Free Software goes Free Enterprise [52.8MB WMV]

Another teaser from much, much early on also from Torvald's himself: "Indeed - the /concepts/ of linux are naturally based on things that have been available in USL and BSD code. That doesn't mean that there is any risk of linux being sued by AT&T - they are all properly documented features, and thus AT&T cannot claim any infringement due to things like uid/setgid etc general unix interfaces."

BSD NET2 distribution requires AT&T license

Mar 26, 2009 11:14 AM Anonymous Insider Anonymous Insider  says: in response to Anonymous Insider

Could the message "2.4.16 & OOM killer screw up" from 2001-12-10 be one of the smoking guns in the Solaris-Linux connection?

Quote by the newly appointed Linux 2.4 kernel maintainer in late 2001: "Andrea (Arcangeli), Could you please start looking at any 2.4 VM issues which show up ? Just please make sure that when sending a fix for something, send me _one_ problem and a patch which fixes _that_ problem. I'm tempted to look at VM, but I think I'll spend my limited time in a better way if I review's others people work instead."

Do these quotes by Andrew Morton point to the smoking gun: "Why does this code exist at the end of refill_inactive()?... Why did you make this change?... The VM code lacks comments, and nobody except yourself understands what it is supposed to be doing. That's a bug, don't you think?..."

Someone else said: "Andrea, it seems -aa (Alan Cox kernel tree) is not the holy grail VM-wise. If you want to merge your good stuff with marcelo, please do it in the 'one patch with explanation per problem' style marcelo asked."

Andrea finally responded: "Lack of documentation is not a bug, period. Also it's not true that I'm the only one who understands it. For istance Linus understand it completly, I am 100% sure."

2.4.16 & OOM killer screw up contains the most important messages.

Nevertheless, there are copies of all the messages in various locations on the Internet such as http://lkml.indiana.edu/hypermail/linux/kernel/0112.1/0615.html , so check the thread list at http://lkml.indiana.edu/hypermail/linux/kernel/0112.1/index.html#615 to view all the messages.

By the way, Andrea Arcangeli worked for Suse which was later acquired by Novell...

Mar 31, 2009 8:10 AM Anonymous Insider Anonymous Insider  says: in response to Anonymous Insider

Look at how a finance board is hijacked by agenda folks:


Mar 31, 2009 9:17 AM Anonymous Insider Anonymous Insider  says:

Something important to add...

Sun has the records of who downloaded Solaris 8 source code in between late 2000 and 2002.


Probably IBM would like to have those records and probably delete them.

Apr 6, 2009 11:43 AM Anonymous Insider Anonymous Insider  says: in response to Anonymous Insider

On the negative outcome of IBM - Sun talks, here is a list of individuals who probably took a look at Solaris 8 source code:


The list corresponds to individuals who asked SCO for ancient Unix source code licenses in 1998. In the list, you'll find various BSD developers. The list also features some individuals with e-mails at IBM.

While Sun has the list of individuals who took a look at Solaris 8 source code, it might be possible that some of these individuals also asked for ancient Unix source code licenses.

A timeline on Unix source code availability is found at http://www.krsaborio.net/research/unix/source_code.htm


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