IBM Wants Sun, But Cisco Should Steal This Deal

• Talks began swirling today about IBM attempting to walk away with Sun for $6.5B. Sun, a company that is still rich with talent, CASH,  technology and engineers, may be talking to the wrong successor.  With increased entry into server market by Cisco and HP, IBM would be buying its way into an industry that is seeing shrinking margins on top of inheriting a gigantic workforce. Most likely, IBM sees an opportunity to buy it’s way into a burgeoning market that they don’t want to be left out of. Furthermore, many of Suns assets can be individually sold immediately to other buyers like Fujitsu who are prime to buy the hardware side of Sun’s business.
• I agree with Om that no one is better equipped to buy and manage Sun than Cisco Systems. Om says

Despite its bold entry into “unified computing” with the launch of a new line of blade servers, Cisco is a newbie in the field and its product line so far is limited. Sun has a vast array of products, not to mention significant software resources (MySQL) for Cisco’s vision of unified and cloud computing and the sales channels and existing customers to help execute it. (IBM has all those things already, and it can pick up new customers via Sun.) More importantly, it has engineers — the very people Cisco values most and historically a strong factor in the networking giant’s acquisition decisions.

• IBM does not “need” Sun, it just gives them a power play. Cisco is the real one that could use a boost buy pushing to make this deal theirs. It could save them a decade of time in catching up with the rest of the data center moguls. IBM buying Sun only pushes the further away.

Tagged as: acquisition, cisco, deal, IBM, Merger, Rumors, sun