Talks were rife in early March that IBM was working on a takeover of Sun Microsystems. On March 18, the speculation was confirmed when it became apparent that IBM offered Sun $6.5 billion for a merger, making the deal one of the biggest in the tech industry, with up to 42% of combined market share, according to IDC.
As IBM consolidates its server business as a result of the merger, the company might retain Sun’s leading engineers while cutting down redundancies. Pundits believe that the right-sizing of workforces could mean a cultural shift—if not conflict—between Big Blue and Sun. In his blog on the Wall Street Journal, David Coursey expressed that “those who stay might be happy to still have jobs, but not so happy to be working for IBM…. 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?”
On the other hand, the Java and open-source communities have mixed reactions to the news. One such fear posted on online discussion boards for Java developers is that IBM would prefer its own Eclipse toolkit over Sun’s NetBeans IDE.
The only sunny prediction about the merger is the probable infusion of money into existing Java projects that have already created niche followings among engineers, particularly where Eclipse is concerned. Open-source projects could also be “forked” as an option until market forces pick them up, analysts said.
According to 451 Group analyst Matt Aslett, “’While the software portfolios overlap, this should not be an issue for IBM as the company could use Sun’s products to drive revenue generation.” Aslett focused instead on the effect of customer choice among IBM’s multiple operating systems and databases.
Still, IBM has to convince its existing clientele about the merits of Sun’s open-source technologies, analysts say. Forrester Research’s Jefferey Hammond said, “IBM also has to reconcile Sun’s middleware business model with its own—and they are quite different.”
And what are the implications on other firms using Java, Sun’s most famous software engineering language? While much of the press coverage about the merger focused on hardware products, AMR Research’s vice president, Ian Finley, explained that “software is a bigger aspect that may change IBM and other large software companies.”
He also added that the merger “could de-stabilize the foundations of Oracle and SAP’s products because Oracle’s Fusion and SAP’s NetWeaver are both tightly wedded to Java.” Because Oracle’s applications are built on Java, as is SAP’s NetWeaver, any disruption in the way Java will be handled by IBM could cause the two companies to adopt other standards, according to Finley.
