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IBM in Talks to Buy Sun?

03.18.2009
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According to the Wall Street Journal, IBM is in talks to buy out Sun. It could be a worthwhile move for IBM, giving them a more complete portfolio. But would it be the right thing for Sun to do? It certainly would have an impact on Sun's battered share price: 

It is unclear whether the negotiations will result in a transaction, but if the deal does go through, IBM is likely to pay at least $6.5 billion in cash to acquire Sun, the people said. That would translate into a premium of about 100% over Sun's closing price Tuesday of $4.97 a share on the Nasdaq Stock Market.

Right now, this story probably means more for IBM's place in the server market, and how Sun could help that. When I think about how this could impact Java, I can only see positives. A company such as IBM, could inject more money into Java development. When I think about the company who gave us Eclipse having more of an investment in Java, it's difficult to see any negatives.

What impact do you think IBM taking over Sun would have on Java?

References
Reference: http://online.wsj.com/article/SB123735124997967063.html
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Comments

Developer Dude replied on Wed, 2009/03/18 - 10:40am

Netbeans would probably die - I am not sure about Solaris/ZFS - I would be that Solaris would become another offering in the OS lineup for IBM and some of its tech might be used in other IBM offerings (although, since it is open source, they could now if they wanted to). Solaris has some cool features, but how many enterprises really use it except in legacy systems?

As for mySQL, I doubt they would kill it - not many people would prefer DB2 over mySQL unless they were already married to IBM and DB (and AIX). Worst case, someone else would pick it up because much of it is open source. Personally I much prefer PostGres.

Glassfish would probably die - not that many people use it in production? Tomcat, JBoss, Websphere, Weblogic are the big containers.

Even if IBM stopped dev and support of the competing Sun tech not many people who aren't already IBM shops would prefer most of the IBM tech. The main tech that would worry me if they tried to kill it would be Swing and Swing is iffy now with Sun anyway. SWT is okay for what it does, but it doesn't have the breadth that Swing does - yet.

IBM is a big Java supporter and has a lot of Java projects, many of which are OSS. Overall I think it would be a good thing as they currently have the wherewithal to support Java.

Bob Smith replied on Wed, 2009/03/18 - 10:43am in response to: B. Ertung

Is this for real or just a rumor?

It was reported by all the major media, so if it is a rumour, it's not just from some guy posting a blog.

GeekyCoder coder replied on Wed, 2009/03/18 - 11:20am

My sentiment is that many innovative products from Sun will be killed. Not only there are too many similar products overlapped between Sun and IBM, IBM is more focus on enterprise market than consumer market. JavaFX seems to fall under consumer market. Swing will probably be uncertain as SWT is used extensively for Eclipse application development. A lot of question marks remain. To me, it is more of a bad news than good news should Ibm acquires Sun.

Ben Kl replied on Wed, 2009/03/18 - 11:25am

2002 interview with Mills when IBM thought about buying it ..At that time it would have cost $40B nnow they are talking $6B

http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2860393,00.html#talkback

 

-" In addition to new revenue streams from the licensing fees generated by Java, this is exactly the position in which IBM needs to be."

-As a tool for marginalizing Microsoft, Java is everything OS/2 was not.

-Java is the heart and soul of IBM's WebSphere (the middleware for the rest of IBM's software portfolio).

-Java is the primary software vanguard that keeps Microsoft from penetrating the datacenter. Even better, Java represents the first credible threat to Redmond on the client side.

-If IBM did manage to bring Java into its intellectual property portfolio, some of IBM and Steve Mill's biggest competitors-BEA , Oracle , CA -would be beholden to IBM in the same way that IBM is now beholden to Microsoft.

 

Considering the price and the abbility to take control of Java and large scale Unix  ( which is struggling fighting cheap intel machines) markes its a bargain for IBM .  I suspect Solaris will eventualy die after some key features get   moved to Aix ( like the newer file systems).

 

The future for Java is very interesting the goals of IBM are obvious , eg try to get some sort of dominance  like IBM had and MS has now and use this as a computer tax. 

 

IMHO IBMs open source efforts have nothing to do with any commitment to it , only to enhance its profit ( eg it failed with its own desktop OS OS2 ( and the follow up project) and used the popularity of Linux as it was cheaper ) . 

 

A lot of Open source projects will struggle without Suns support.

 

Ben Kl replied on Wed, 2009/03/18 - 11:32am in response to: B. Ertung

How can antitrust not allow it ?

 

In terms of hardware there is plenty of competition from Linux PCs , in terms of Java there is no difference ( as far as the regulator is concerned) between IBM and SUN owning it. 

 

This will be past without issue.

 

Re Open Office - I bet they let it go and setup a cheap paid version , they are looking at Office revenues in the long term.

Coffee Jolts replied on Wed, 2009/03/18 - 12:14pm

With the current state of the economy, Apple and Microsoft could merge without a peep from the SEC.

Mike P(Okidoky) replied on Wed, 2009/03/18 - 12:21pm

Although IBM does a lot of very sophisticated research, I haven't been impressed how their Java releases were always lagging behind. Way behind sometimes (adoption of Java 5 for one). Sun and IBM together, who knows what'll happen to progress. I'm not sure if it's good or bad. IBM has their own development research on Java, and they've done amazing work on many fronts for their versions of Java. Far *far* more than most realize I bet.

I *think* I'd rather see IBM pick them up, rather than, say, an Oracle. I'm cautiously exited...

JeffS replied on Wed, 2009/03/18 - 12:39pm

Maybe, just to be optimistic, IBM will keep stuff like Netbeans and Glassfish around, just for the opportuntiy for more services business.  Both Netbeans and Glassfish have a lot of developer mindshare right now, and IBM know about the importance of devloper mindshare.  And, IBM is a huge services company - last I checked services were about 60% of IBM's revenue.

Also, if IBM plays shenanigans with Java and Swing, to gain competitive advantage over Oracle, et al, then look at OpenJDK really taking off.

 

Michael Urban replied on Wed, 2009/03/18 - 12:52pm

NetBeans is dual licensed and one of those licenses is the GPL. Because of that, IBM can't kill it. The worst they can do is stop finanically supporting its development and turn it over to the community. But they can't kill it.

Slava Imeshev replied on Wed, 2009/03/18 - 2:28pm

Personally I think this will have unpleasant results for Java. Just look at IBM's JDK that is compatiable only with IBM products. It is a plain bad idea.

 

Regards,

 

Slava Imeshev

 

Jakub Grabowski replied on Wed, 2009/03/18 - 3:05pm in response to: Jacek Furmankiewicz

I'll miss Netbeans! I don't agree with Jacek saying that Sun guys should spend time on writing Eclipse plugins rather than NB! Competition is always good. Windows is also a de facto standard. Should Linux guys spend their time writing apps for Windows instead of writing Linux? ;-)

Jeroen Wenting replied on Wed, 2009/03/18 - 3:02pm

I'm dusting off those .NET books and cancelling the plans to buy more Java related books and training for now. IBM will kill Java as a standalone platform (turning it into a WebSphere centric thing only) and I've no interest in that.

JeffS replied on Wed, 2009/03/18 - 3:32pm in response to: Jeroen Wenting

Cat's already out of the bag for Java - it's already an open standard, and open sourced (OpenJDK, IcedTea).  Plus, other powerful players, such as Oracle and Google, to name but two, won't let Java become a WebSphere centric platform - they have too much vested interest in an open Java platform.

 Also, IBM itself has a vested interest in keeping Java open and cross platform.  Making Java Websphere centric would marginalize Java, causing mass defections, and in turn marginalize WebSphere.

 With Java, a rising tide lifts all boats.

Mark Haniford replied on Wed, 2009/03/18 - 3:46pm

The naysayers haven't said a better company to buy Sun.  Sun has been dying for years, so someone was going to buy it, unless it just closed up it doors and started selling off assets.

Anthony Goubard replied on Wed, 2009/03/18 - 4:18pm

Problem maybe solved.

Today Sun stock + 79%, IBM -1%

Just hoping it's not IBM who bought the shares.

http://www.google.com/finance?client=ob&q=NASDAQ:JAVA 

Neil Bartlett replied on Wed, 2009/03/18 - 5:21pm

I'm surprised to see so many people commenting on NetBeans but not Java itself. This deal, if it goes ahead, could actually be good for Java. I think IBM would free up access to the TCK and encourage more open governance of the Java standard. Java is being held back right now by Sun's need to extract money from J2ME licensees. IBM knows plenty of other ways to make money from Java that Sun never figured out. As for NetBeans, well I'm hoping IBM will re-license it under the EPL and turn the valuable bits (i.e. Matisse) into Eclipse projects.

Ben Kl replied on Wed, 2009/03/18 - 8:03pm in response to: JeffS

"Also, if IBM plays shenanigans with Java and Swing, to gain competitive advantage over Oracle, et al, then look at OpenJDK really taking off."

 

However if they do play "shenanigans" they will put in say Billions ( after all they saved $30B++ from not buying SUN in 2002)  and improve the product say a big Eclipse/Axis/UI over haul or a Xaml rendered UI.   This will make the choice very hard for people.

 Sun own all ( almost)the rights... name libs etc  these will move to IBM  ( A regular visitor in the patent courts in the past) will sue those individuals out of existance if they become relevant.

IBM became a service company out of nececity after they lost market share on software (OS2 , Lotus ) and Hardware  . 

 

 

Ben Kl replied on Thu, 2009/03/19 - 1:02am in response to: Anthony Goubard

"Today Sun stock + 79%, IBM -1%"

 

It was IBM the talk is the are offering a 100% premium ( after all they were considering buying the company in 2002 when it was valued at like 35B instead of 3B now). Hence institutionals are snapping it up hoping to make a quick buck when the IBM offer commes through.

 

IBM shares may drop a fraction as IBM will have to justify to investors how SUN and JAVA ( a loss making company) will make back the 6B IBM will have to pay.  However the synergy is great , the only business of Sun that makes a lot of money is the hardware and no one but IBM will pay a 100% premium for that ( IBM is the main competitor) .  Oracle et all get very little from SUN as Java does not make big $$$ ... yet.

JeffS replied on Wed, 2009/03/18 - 10:31pm

I just hope that NetBeans survives this. 

I'd rather use Netbeans than Eclipse, for, well, everything, any day.

tomsmish replied on Wed, 2009/03/18 - 10:33pm in response to: Wai Ho

You got up so early! Your reply was submitted at 6:14am. Are you Asian?

remon chan replied on Thu, 2009/03/19 - 12:13am

that sounds good news!

Prashant Saraf replied on Thu, 2009/03/19 - 2:05am in response to: remon chan

What is good in this?

Martin Wildam replied on Thu, 2009/03/19 - 3:11am

I also worry about Java and NetBeans if Sun is bought by IBM.

I guess why so many worry about NetBeans and not about Java is the fact, that Java is anyway the core of a lot (all?) products of IBM, but NetBeans is a competition with Eclipse.

I like very much the fact that I could choose between SWT+Eclipse and Swing+NetBeans. Although even better would be if I could choose between Eclipse plus SWT and Swing seperately.

Although I like the idea of Umberto about splitting the company and sell only a part of it I do not really think that IBM would like that.

I am glad that the Java core is already Open Source with a large community.

There are two things I really hate:

1. People just looking at the stock and share prices and attributing value only to those with high share prices. Don't they realize that it is just the gamblers that create those prices. I imagine most of the brokers do not know much about what both comanies really do and just want to minimize money loss in these tough times.

2. The strategy of growing and growing and growing just to gain more power. It seems to me (from current point of view) that IBM still didn't notice that general strategies in economy should change. This is not a sign of the ability to establish efficient and productive partnerships.

Fabrizio Giudici replied on Thu, 2009/03/19 - 3:32am

Jacek, while I personally agree with you on the low relevance of scripting languages etc (but I know that a lot of people see things differenty), I don't believe corporates "want to use Java". I mean, they want to use a good tool. If they think Java is a good tool, they use it. In this case, they don't need a lot of extra stuff in the language (in fact, all my main customers use Java, are fine with it and see the ever-lasting debate about closures and such as a waste of time). Those who are not satisfied with Java will use a different thing.

 

Mohamed El-beltagy replied on Thu, 2009/03/19 - 3:54am

As far as I have read, and that's not all, I totally agree. IBM should not buy SUN at any circumstances. This will be a catastrophe for the Java community.

But my reasons are:

- IBM and SUN are the top competitors in the Java world. If they merged, there will be no competition. Competition is what makes us look for a 'better' product; not an 'only' product.
- IBM attitude is for commercial products. Not interested in open source. Eclipse was opened sourced for having the IBM staff focus entirely on developing plug-ins for the readymade Eclipse. It's a very smart 'commercial' move.
- SUN on the other hand, is taking open source seriously and they have ported most of the viable products to open source community.
- I won't dig about each product, but the main concern remains about the main two projects that SUN leads and which decides the Java future: JDK and JCP

I personally, like both products from SUN and IBM. I like GlassFish, as much as I like Websphere. I like NetBeans as much as I like Eclipse. For me, each one of them has its own usage. And each one of them is a 'better' product but for a certain situation.

I love Java and cannot imagine using another language. But really, it will be a killing move to the Java community if IBM bought SUN.

But of course, I am sure that this will not be the only concern that SUN will think of. They will think of it financially as well. Which, I am not sure if it will be easy for SUN to say No. For SUN, it's not all about Java, GlassFish or whatever products they have. But it's also about money. It has always been and will always be for such organizations. Keep that in mind.

Will, I personally pray that this would not happen. :)

Serge Bureau replied on Thu, 2009/03/19 - 4:07am

IBM never came with any original software, Eclipse is very weak. IBM as no imagination, SWT is the stupidest concept ever and anti-java In fact is IBM get's Java, it will cripple it. IBM getting SUN is the worst scenario ever ???

Jeroen Wenting replied on Thu, 2009/03/19 - 5:51am

yes, it's the worst scenario ever. Not only will they kill off anything for which they have their own alternatives, they will do their utmost to so tightly what they have no alternatives for (including the Java language) into their own platform that it becomes quite useless outside of that.
As a result, Java will likely disappear except as a sort of embedded scripting language for WebSphere, similar to serverside Javascript in the old Netscape application server (anyone remember that one?) or Silverstream Pages in that server. IBM inventing SWT as a corruption of Swing that works solely in the context of Eclipse (an IBM product open sourced mainly to attract cheap labour to maintain it) is a good example of what will happen, and I fully expect them to retire Swing and AWT as there's no place in the WebSphere Application Platform for multiple GUI libraries.
IBM isn't going to invest in Java as a standalone product if that product can be used profitably by their competitors (like Oracle and JBoss to name but two).
OSS implementations will soon wilt and die with no largescale corporate guidance and funding from Sun.

Jacek Furmankiewicz replied on Thu, 2009/03/19 - 6:37am in response to: Jakub Grabowski

Maybe my point of view is clouded by the fact that NB still looks like crap on Linux...how many years is it gonna take for Sun to fix font rendering on Linux......

Ben Kl replied on Thu, 2009/03/19 - 7:00am

IBM are likely to give eclipse a big overhaul  ( $$$) , they will probably develop some new Java libs in the vein of products like Microsofts WPF/Silverlight and WCF (RCP , Java.fx and axis) , the Java offerings are very weak in comparison but it takes big $$$ to come up with a new desktop/web rendering engine ( MS spend 9 figures on each and IBM is not known for spending less than Microsoft on projects) .While it will have a commercial bent it should be a good thing for the community.

 

Mina Shokry replied on Thu, 2009/03/19 - 9:04am

wouldn't someone start an online petition to stop this?!

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