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IBM Finally Strikes At Microsoft?
By Jay Fougere
Expert Author
Article Date: 2009-03-20
Earlier this week the rumour mill was abuzz with talk of Sun being bought by IBM. I am skeptical and I have to wonder what exactly IBM hopes to gain in this acquisition.
Most of the software and services owned by Sun are technologies for which IBM already has solutions. Sun has MySQL while IBM has DB2; Sun has Java and its JDK while IBM already has access to Java and has been promoting the Eclipse IDE; Sun has Solaris/OpenSolaris while IBM has AIX; Sun has the SPARC line of processor chips while IBM has their own Power chips; Sun and IBM both have strong ties to the Linux community; and the list goes on and on.
On the surface it would seem that an IBM purchase of Sun would be redundant, although others have speculated that this deal could be IBM positioning themselves against Cisco Systems; A new-comer to the data center but a name well known in all IT shops.
With many lower cost alternatives on the networking front, the network hardware market is quickly becoming commodotized; Cisco needs to expand their business outside of commercial networking. Cisco's purchase of Linksys a few years back gave Cisco access to the home user market. More recently, Cisco has been buying up online businesses in the communications and media markets, businesses that complement Cisco's core networking business while adding marketable technologies to Cisco's portfolio. Cisco is positioning themselves as a communications and media vendor.
But enough about Cisco. Cisco's new acquisitions and forays into the data center suggest competition with Microsoft before IBM or Sun. Microsoft has been making pushes in the same areas as Cisco - communications, media and collaboration. Also, I am not one to believe that a company like IBM is going to make large, spur of the moment purchases in order to combat Cisco in the data center. IBM is already well established on that front and I don't see Cisco having the pull in this economy to move IBM's customers away from IBM.
Sun, on the other hand, has been having a difficult time with this new millennium. The company that was 'The' hardware and software company for Unix in the 90's has lost their edge and have had a difficult time adjusting. Sun has also had a strange relationship with the open source community; a community that has been commodotizing most of Sun's software portfolio. With the exception of Sun's purchase of MySQL it always seemed that Sun was "too little too late" with respect to open source. Even opening up Solaris seems like an act of desperation, the last blow in the battle against Linux. This is in contrast to IBM who is the poster child of open source in recent years, beginning with their announcement of a huge investment in Linux at the dawn of the new millennium and leading up to the SCO farce.
I think IBM has something else on their mind with regard to acquiring Sun. IBM is already a software services and consulting company. The only reason IBM even carries hardware is to prop up their services business. IBM has an incredible software stack from collaboration software on up to everything that happens in the server room. The one area that IBM lacks is the corporate desktop. IBM has been losing money to Microsoft and its desktop products for decades; beginning with the operating system, first DOS then Windows, not to mention the bad blood surrounding OS/2, and leading into desktop software, especially Microsoft's Office line of products.
Microsoft is also notorious for their dirty business practices and, while IBM held that candle in the 80s, my gut tells me that IBM would like nothing more than to not have to deal with Microsoft at all. IBM has extensive Linux experience, thus there is a non-Microsoft operating system available to IBM; one in which IBM knows inside and out. IBM has all of the software required for the data center from databases and virtualization software to development environments and platforms and middleware. The one thing IBM really lacks is an office suite.
This is pure speculation, but I think IBM is purchasing Sun in order to complete their software stack and compete with Microsoft. I think IBM's main investment here is in the office suite, OpenOffice.Org/StarOffice. Don't get me wrong, portions of Sun's other businesses would remain profitable (MySQL, Java etc...) while other portions would simply be killed (Solaris) or wholesaled off, otherwise IBM could never justify the multi-billion dollar price tag.
The one thing OpenOffice.Org/StarOffice lacks is collaboration software in the spirit of Microsoft's Outlook/Exchange products. IBM already has this with their Lotus products. Combine Linux Desktops, OpenOffice.Org/StarOffice, Lotus and IBM's data center hardware/software and you have top to bottom solutions for customers that are completely in the control of IBM. IBM no longer has to worry about Microsoft's convoluted licensing and backroom deals. In the eyes of IBM the entire software stack is an add-on value to their main business of consulting. The costs for that software stack drop to almost nothing if IBM is no longer paying licensing fees to Microsoft. IBM is also not subject to Microsoft changing their licensing terms at this point. This is as much about IBM freeing themselves from the ball and chain that is Microsoft as it is about acquiring Sun.
Thanks for reading and let me know what you think!
About the Author:
Jay Fougere is the IT manager for the iEntry network. He also writes occasional articles. If you have any IT questions, please direct them to Jay@ientry.com.
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