Sun Microsystems (JAVA)

[chipguy]

Looks like Sun's Niagara SPARC boxes have lost
any reason for existence since Intel released its new
Nehalem based Xeon chip.

Two socket servers:

Sun T5240 - 2s/16c/127t - 142 SPECint_rate_base2006
Dell T610 - 2s/8c/16t - 232 SPECint_rate_base2006

Intel's new chip gives over 50% higher throughput with
a fraction of the threads, leading edge single thread
performance for broad general purpose usefulness,
and much lower system cost.

So much for Sun's little ray of sunshine in an otherwise
declining market for SPARC based servers.

[eastunder]

For IBM, Not Acquiring Sun Is Likely Just A Minor Setback

By Jessica Hodgson
Of DOW JONES NEWSWIRES

http://ih.advfn.com/p.php?pid=nmona&cb=1239079045&article=37199229&symbol=N%5EJAVA


SAN FRANCISCO -(Dow Jones)- The breakdown of talks to acquire Sun Microsystems Inc. (JAVA) won't significantly set back International Business Machines Corp.'s (IBM) position in its hardware, software or services markets, though a deal would have given it useful technologies.

Over the weekend, The Wall Street Journal reported that Sun's board had rejected a formal offer from the Armonk, N.Y.-based technology giant. Talks had been going on for several weeks and the deal was initially pegged at close to $8 billion.

IBM and Sun spokespeople declined to comment on the developments. But a person familiar with the situation confirmed the talks had broken down.

The deal would have brought IBM a host of assets, including significantly bulking up its presence in high-end servers used at corporate data farms and brought its share of the market to 42% from 32%, according to IT research firm IDC. It also would have given IBM intellectual property, such as the Java programming language, that could be used to further the company's ambition of becoming a player in cloud computing, the growing practice of selling computing power to customers via the Internet.

Still, most analysts say IBM's interest in Sun was primarily opportunistic, rather than strategic. Santa Clara, Calif.-based Sun, once a Silicon Valley pioneer, has long found it difficult to make its cutting-edge technologies profitable and was looking for a strong corporate patron. While IBM may have benefited from combining with Sun - the deal would have been accretive at reported deal prices to both non-GAAP earnings and free cash flow, according to Citigroup Equity Research - IBM, which posted annual sales of $103.6 billion, will remain one of the IT industry's biggest players with or without Sun.

"We believe IBM will be able to maintain strong marketplace position without buying Sun," Tom Smith, an analyst with Standard & Poor's Equity Research, said in a client note Monday. "Passing on a potential deal leaves IBM shares attractive, in our opinion."

IBM's stock price was down 1.8% at $100.37 in mid-afternoon trading, tracking the broad technology sector. The company's shares are up 17.3% so far this year, while the S&P 500 is down 8.9%.

Sun shares were down almost 23% at $6.59.

Whether IBM needs to increase its presence in computer hardware, a business from which it has been withdrawing over the past decade, is an open question. The company gets more than 80% of its profits from its global services business and software. Sales of the high-end, proprietary servers IBM and Sun make are losing market share to cheaper servers based on Intel Corp.'s (INTC) ubiquitous X86 chips.

Some observers said IBM's failure to win Sun wouldn't seriously hamper the company's cloud-computing initiative. Cloud computing is seen as a key growth opportunity for IT companies and research firm Gartner Group forecasts the industry will grow 21.3% to $56.3 billion in 2009.

"Many of the things that are most interesting about Sun in the cloud-computing space are conceptual technologies which aren't necessarily businesses yet," said Eric Johnson, director of the Center for Digital Strategies at Dartmouth College's Tuck School of Business in Hanover, N.H. "Sun's been thinking about it longer and harder than IBM, but IBM can certainly do it without Sun."

Meanwhile, an acquisition of Sun would have posed a major integration challenge for IBM and would have come with a certain amount of antitrust risk as it would have combined two of the largest players in the computer-server market. While few analysts thought a deal would automatically be blocked, several anticipated a review process which could have resulted in IBM being required to divest some of its acquired assets.

[NovoMira]

MLM, I can barely keep up with stocks - as a matter of fact, it's got to the point where I can't keep up at all anymore. Each time I try to pare my holdings, at least down to 10 or less...something happens and I end up buying more! Thus taking on options too is simply out of the question.

I see you're also playing Citigroup. So am I. How about Ford?

I'll be sure to search for some good news for you when we get close to the 17th. ;)

[MorningLightMountain]

Ritter says he’ll confer with Sun Microsystems execs about potential IBM merger
April 6, 2009 8:45 PM ET
advertisement
Article tools

* E-mail this article
* Print-friendly version
* Discuss this article

bizjournals.comAll bizjournals.com news

Colorado Gov. Bill Ritter will speak with Sun Microsystems Inc. officials about a potential merger with IBM Corp., but will not advise them for or against it, regardless of its effect on jobs in the state, he said Monday.

Ritter is in California’s Silicon Valley with a number of economic development and innovation officials, meeting with companies to learn more about how to improve the business environment for developing or attracting telecommunications firms to Colorado. As part of the trip, he plans to meet Tuesday with leaders of Santa Clara, Calif.-based Sun (NASDAQ: JAVA).

Sun and IBM (NYSE: IBM) each employ thousands in the Denver area — Sun in Broomfield and IBM in north Boulder.

Sun has been in talks with IBM about a potential merger that could prompt layoffs at Sun’s Broomfield campus. Those merger talks have neared collapse but remain ongoing, according to news reports Monday.

Ritter said he would talk to Sun officials about what is happening and about how the company can retain jobs in Colorado. Despite job retention and growth being a top priority of his administration this year, he will not weigh in on the matter, however, he said.

“It’ll just be a conversation we can have to hear them tell us what their plans are,” the Democratic governor said in a teleconference late Monday afternoon. “But we don’t feel it’s our role to tell them what to do.”

Don Elliman, director of the Governor’s Office of Economic Development, added that he is not sure that such a merger wouldn’t add to IBM’s presence in Colorado.

“It’s kind of a moving target here,” Elliman said. “In the aggregate, we feel pretty good.”

The two-day trip has a twofold purpose, Ritter said: To learn from successful companies about how to foster growth in the telecommunications industry and to talk to companies specifically about expanding in Colorado.

The Colorado team met with officials from Microsoft and Google Monday to understand how they grow their corporate functions in other states, he said.

It also met with venture capitalists specializing in telecommunications technology and with entrepreneurs who have developed start-up companies. Colorado officials asked about what kind of financing and what kind of business ecosystem were needed to foster such growth, he said.

Although Ritter did not report any new jobs, he did say that Silicon Valley leaders were impressed by Colorado’s TechStars program, in which successful tech companies mentor start-ups.

“Our purpose in making this trip (is one) we’ve accomplished already,” he said of spreading information about Colorado’s technology business atmosphere.

Copyright 2009 bizjournals.com

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=ACBJ&date=20090406&id=9764890

[MorningLightMountain]

well, if you do options be prepared to lose the entire thing.....but of course, the gains can be spectacular.....I assume you know how they work, also a very useful tool at times for hedging your normal position......

BTW, all I really need before end of trading on April 17th is word to come out (maybe from some other "unnamed person", if you get the drift) that negotiations are still on, and I will be easily into the money......no need to wait for a finalized deal, or anything like that, just a pop in PPS on expectation that things are moving ahead......let the arbiters wait for the final payout, not me......

anyway, it will be interesting if anything.....but I admit this is pure speculation (based on the fact that the starving shareholder outrage will force Sun to do SOMETHING after getting a nice whiff of food), its not really investing.....but again, I consider the risk/reward acceptable, and have some extra cash to throw in the pot, thanks to the nice run by C (Citigroup, not the language!) recently.......

PS: I also own over 1K shares of JAVA outright, but my favorite tech stock is WDC for many years now, good for trading, and pretty good fundamentals considering this economy......had a nice run recently, and I rang the WDC bell once again, for who knows how many times now......literally hundreds for sure....

[NovoMira]

I can only imagine what it's like on the Yahoo message boards now...haven't been there in a couple of years at least.

I did check out the RB boards today though... for the first time in a long time. Not much happening there which isn't surprising! Neither one of them can even come close to iHub, IMO.

Frankly, I'm just sick of seeing Sun in my portfolio and wish it were gone albeit I prolly won't get my share of the milk...ever.

Two weeks? Man, that's pushing it but then one never knows. For your sake I hope it happens! Have never done options but after reading about your AMD windfall I'm tempted! ;)

[MorningLightMountain]

speaking of Yahoo, I checked out the JAVA message board, and its like a jungle over there.....good to see some intelligent conversation on this one, the Yahoo JAVA board is useless......

I also felt some initial anger when I first read what you posted, but them realized the exec-compensation was a non-issue in the larger scheme of things (like $7B), more emotion than substance, but it sure will make Sun look that much worse if the deal doesn't fly......but I understand the insiders will always walk away with a final overflowing pail of milk when these buyouts happen......but at least they won't be doing it with TARP funds here.....

anyway, let's hope articles like this, no matter what their real merit, will light a fire under some people......my call options expire in less than two weeks, so get 'er done already (yes, I want my share of the milk too!!!!)....

PS: the last time I made this big of an options bet was back in the INTC vs AMD 386 "clone wars".....I was on the AMD side, and nailed a huge windfall, with options that went from like 1/32 to $5 in a few days, just before expiration.....now THAT was speculating!!!!!.....(I had paid about 1/2, but the price had eroded to almost zero, then BAM, a decision in the case was announced.....man, nothing like seeing a security go from a few pennies to $5 in worth, and holding a LOT of them, that is adrenaline).....

I love this game.....

[NovoMira]

Thanks MorningLightMountain (unusual handle but I like it)...

Having watched the YHOO/MSFT deal fall apart I confess I'm a tad bitter about what's happening with Sun/IBM...history repeating itself and all that.

Additionally after all the hoopla re AIG bonuses (and others)...that article hit a sore spot with me!

I agree with much of what you've said, fwiw. You have a cool head.

Right back atcha with the membermark.

[MorningLightMountain]

sorry, I wasn't ragging on you, just the situation.....seems like some sneaky stuff is going on, which is no surprise.....it just POed me to see such an article, we all know the insiders make out big when one of these deals goes down (actually that didn't seem too excessive for Sun's top management, all things considered), but its such a small part of the overall deal.....obviously, the exec-compensation card is a hot one to play, very emotional, but later in that article it was admitted that price was the main obstacle (no kidding, really????)......

anyway, with so much hear-say from unnamed people, I would like to read an official statement.....seems to me if this deal falls apart, EVERYONE loses, so I don't see the logic in it not happening, thus my bet is placed, for better or worse (no long term holder, just a trader, but I can imagine the turmoil of a longtime shareholder, been there, done that, now I don't hold ANYTHING too long)......

PS: I'm not familiar with all the details, but the basic story of Sun.....

PPS: member-mark added, thanks for your info.....

[NovoMira]

Don't ask me... I'm just the messenger AND a long time stockholder of both Sun and IBM.

BTW, are you familiar with Scott McNealy and the history of this company (Sun)?

[MorningLightMountain]

"""...according to people familiar with the situation..."""

and who, pray-tell, would THEY be?????

"""...said the people, who declined to be named because the talks were private...."""

oh, OK......well, just because you don't give your NAME, then leak admitted PRIVATE details about a multi-billion dollar deal makes it OK????.....HELLO, IS THERE ANYBODY OUT THERE???? (not the SEC, obviously).....

"""....according to one of the people. The acquisition fell apart primarily because of price, said a person familiar with IBM’s stance."""

I thought one of the "other people" said exec-compensation (certainly not a hot-button topic these days) was an issue????....well, at least a few million dollars gets the blood boiling about a canceled $7B deal if it falls through.....what does that work out to, like a fraction of a penny of the offered share price haggling????

give me a beak, this entire thing stinks......

[MorningLightMountain]

I considered those, but went with the April $7 calls, in the mid .40s, as I think something will transpire within the next two trading weeks, and this way I got almost twice the bang for the buck vs the May calls......obviously, I'm making an all or nothing bet here, but think the risk/reward is worth it......

BTW, am **I** the only one who noticed that, when it comes down to it, the supposed "breakup" of talks (which was never officially commented on by JAVA or IBM) is basically hearsay at this point, coming from hazy "undisclosed source close to the action", with comments that the "deal is "apparently off", "seen as dead", blah, blah, blah......now, MAYBE true, MAYBE posturing, but I think the investment media is putting the cart in front of the horse WAY too soon......Sun must know the ramifications of this falling through, and certainly remember the nastiness that happened with the Yahoo-Microsoft non-buyout.....people that smart can't be that stupid, can they?????? (ut oh, maybe I should not have asked that....)

also, on a hypothetical level (**I'm** not one for conspiracy theories, haha), if Big Blue wanted more leverage, what more could they ask for than a day like this one, where "undisclosed sources" shaved 2 bucks off of JAVA, and many shareholders are flipping out?????.....presto, all of a sudden, $9 looks pretty sweet, and $8-something is not too shabby either, now that Sun shareholders got a taste, and watched it evaporate.....something along the lines of a "you don't know what you had until you lost it" ploy......

Land of the Blind.

(Re-education Camp Director):

"What's better than a big juicy steak?

Nothing.

A stale piece of bread is better than nothing.
And nothing is better than a big juicy steak.
Therefore a stale piece of bread is better than a big juicy steak."

(done with my CRAZY theories, because this game is always fair and balanced for all.....note: some sarcasm may be present in this post)

[NovoMira]

Sun: May the Schwartz Be With You

Digital Daily Published on April 6, 2009
by John Paczkowski

Sun chairman and co-founder Scott McNealy probably has a good joke or two about the way the company’s acquisition discussions with IBM (IBM) have gone down, but he won’t be relating them as CEO any time soon. That seems to be the word from Sun (JAVA), which this afternoon dismissed speculation that McNealy will replace CEO Jonathan Schwartz in the aftermath of the deal’s collapse. “As a policy Sun does not comment on rumors or speculation,” the company said in a terse statement. “What we can say is that Sun is committed to its leadership team, growth strategy and building value for its shareholders.”

Whether that is a true vote of confidence remains to be seen. Certainly, Yahoo (YHOO) made similar remarks about Jerry Yang during its ill-starred negotiations with Microsoft (MSFT), and we all know how that worked out for him…

[NovoMira]

This article is going to blow your mind (bolding is by me)! I am sick to death of the greed exhibited by some of these executives!

IBM-Sun Deal Said to Fail Over Payouts, Other Terms (Update2)

By Connie Guglielmo and Katie Hoffmann

April 6 (Bloomberg) -- International Business Machines Corp. and Sun Microsystems Inc.’s merger talks collapsed after disputes over millions of dollars of payouts to Sun executives, in addition to the takeover price and conditions attached to the deal, according to people familiar with the situation.

Chief Executive Officer Jonathan Schwartz and Chairman Scott McNealy have contracts that mean they would receive three times their annual pay, including salary and bonus, should Sun be acquired. IBM balked at the prospect of making payments to executives, the people said. Schwartz’s salary was $1 million last year and his target bonus was twice that amount.

A disagreement also erupted over the price, with each side haggling over an offer of $9.10 or $9.40 a share, said the people, who declined to be named because the talks were private. Sun’s board contended IBM wanted too much control over Sun’s projects and employees before the deal closed, without providing guarantees that the transaction would be completed if it faced delays such as antitrust review, the people said. “IBM was in the driver’s seat,” said Peter Sorrentino, who oversees $13.3 billion at Huntington Asset Advisors in Cincinnati, including almost 1 million IBM shares. “Sun can survive as an independent company, but the longer the recession goes on, the more likely it is the value of the franchise begins to fade.”

IBM, based in Armonk, New York, had planned to announce the deal at 7:30 a.m. New York time today, one person said. Sun’s board, advised by Credit Suisse Group AG and the law firm Wilson, Sonsini, Goodrich & Rosati, told IBM on April 4 it was breaking off exclusive talks. The next day, IBM, advised by the law firm Cravath, Swaine & Moore LLP, retracted its offer.

No Further Meetings

No further meetings are scheduled between the two companies today and Sun is skeptical of whether a deal can now come together, according to one of the people. The acquisition fell apart primarily because of price, said a person familiar with IBM’s stance.

Sun, based in Santa Clara, California, dropped $1.93, or 23 percent, to $6.56 at 4 p.m. New York time in Nasdaq Stock Market trading. That was the biggest decline since July 2002. IBM fell 66 cents $100.56 in New York Stock Exchange composite trading. Edward Barbini, a spokesman for IBM, the world’s largest computer-services provider, declined to comment. Sun spokesman Shawn Dainas declined to comment.

Largest Deal

The collapse of what would have been the biggest technology deal of the year increases pressure on Schwartz to find another suitor as Sun heads for its biggest annual loss in six years.

The offer, equal to about $7 billion, was as much as 11 percent higher than Sun’s stock price on April 3. Sun jumped 79 percent on March 18, the day the talks were first reported. “Sun made a horrible mistake,” said Paul Meeks, a principal with Winsor Asset Management in Charleston, South Carolina. “Wall Street analysts probably optimistically expect their revenue to decrease year-over-year for the next several years -- they should have just taken that money and ran.”

In a statement, Sun said it is “committed to its leadership team, growth strategy and building value for its shareholders.” Sun’s change of control provisions would award its top executives, other than McNealy and Schwartz, 2.5 times their salary and bonuses, two years of health benefits and accelerated vesting for stock options and restricted stock awards, according to a regulatory filing.

McNealy’s Compensation

McNealy, who co-founded Sun in 1982, was awarded $6.45 million in compensation last year, including $1 million in cash for his “service as an employee of Sun,” according to the filing. He owns and has options on 17.5 million shares, giving him a 2.3 percent stake in the company. Schwartz owns or has options on 1.64 million shares. His total compensation last year, including salary, was $7.7 million.

Sun is the fourth-largest maker of servers, the computers used to run Web sites and corporate networks. IBM is the top vendor, so the combination would have paved the way for IBM to increase its lead over No. 2 ranked Hewlett-Packard Co. to almost half the $53 billion global market for the machines.

In the fourth quarter, server sales industrywide fell 14 percent, the most since the aftermath of the dot-com bust, as customers held off buying both costly and inexpensive systems, according to research firm IDC. Sun depends on servers for almost half its sales and counts General Electric Co. and General Motors Corp. among its customers. The company is poised to post a $1.24 billion loss for the year ending June 2009, according to the average of six analyst estimates compiled by Bloomberg.

Antitrust Scrutiny

If the two sides agree to a deal, they may draw antitrust scrutiny for their combined use of Unix, an operating system that runs the most powerful server machines. IBM leads in sales of those machines, with a 36 percent share, while No. 2 Sun holds 28 percent, according to researcher Gartner Inc. An antitrust review caused concern for both sides because of uncertainty about how such cases would be handled by President Barack Obama’s administration, one person said.

When Schwartz took over as CEO from McNealy in 2006, the company had losses totaling $4.51 billion over four years and was falling behind rivals such as IBM, Hewlett-Packard and Dell Inc. in the server market. To buoy profit, Schwartz is slashing as many as 6,000 jobs.

[bUrRpPPP!]

I picked up the May $7 calls @ .83 today.....

[MorningLightMountain]

I have a boatload of call options betting on it......also, I don't think Sun wants "The Wraith of Yahoo" stigma upon them:

"""Shares of Sun Microsystems tumbled 22.5 percent after it rejected a $7 billion buyout bid from IBM, leaving the smaller server and software maker vulnerable to lawsuits from shareholders nervous about its viability as a stand-alone company."""

"""Brinkmanship

Some said the breakdown of the talks might just be brinkmanship and the two sides could come back to the table.

"We don't think the final chapter of this conversation's been written," said Wirtz, adding that shareholders would likely demand an explanation if talks didn't resume. "If there's no deal, all shareholders of Sun want to hear an articulation of why this company will work independently. A lot of people own the stock and you may see some noisy investors," he said."""

http://www.cnbc.com/id/30073168

[afxm]

Dell/Sun, then give big blue a run for market share...I like that !
afxm

[afxm]

ibm is not crazy, 41% market share! If they are not Stupid, They'll be back.

[eastunder]

Very interesting. I didn't know that. I'm so disconnected from Java at this point, but with the current drop I wonder if now isn't the time to pay more attention?

I have been debating the 'buy it or don't buy it' all morning, which is why I posted the chart. I want to keep an eye on it as I continue the inner debate.

Good luck, Amiga!

[NovoMira]

Actually I think it's interesting too, East. Dell was mentioned earlier also.

One good thing that might come out of it is if anybody else acquires Sun besides IBM there shouldn't be any anti-trust issues.

[eastunder]

Maybe it's not the set back you think it is?

HPQ? IBM? Who's it gonna be?

I think it's kinda interesting. ;)

[NovoMira]

Thanks for the chart, East.

BTW, may I tell you how I feel about Sun xxxxxxx us (long-time stockholders) over...AGAIN?

[eastunder]

java chart

[MorningLightMountain]

I'm buying April $7 Calls in the mid .40s, if the deal goes through its a 4-5 bagger, if not, well then a total loss.....risk to reward seems OK for me at this point, I'm hearing that Sun management is divided on this deal, and the situation is still fluid.....anyway, giving it to next Friday's option expiration seems enough time for JAVA to sink or swim......

[MorningLightMountain]

yep, I'm looking for some flipping action today, my spidey senses are tingling with an interday low near 6, and a high near 7......got $50K in dry powder ready to pounce....

trade 'em if you got 'em......at your own risk, of course.....

[Hawkeye_tt]

Let the games begin.........
Watching for re entry again on this move.
Could be just one more trip....

GLA

Hawk

[MorningLightMountain]

ut oh, down we go, $2.50 haircut in premarket.....time to break open the dry powder keg.....

[afxm]

Have you seen todays news ?
http://www.reuters.com/article/mnaNewsTechMediaTelco/idUSN0534476420090405
IBM is trying to steal Sun imo, they are making a lowball offer in an attempt to take advantage of the economic downturn. Looks like the bod @ sun told ibm to hit the door and to not let it hit them in the A$$ on the way out.

[MorningLightMountain]

dreaming is nice, but the latest news is now saying 9.50.....the problem is Sun isn't the party holding the stronger hand, and they have been looking for a buyer with increasing desperation, and IBM knows it......(even at 9.50, I'm sure many Sun insiders will walk away with a nice cash payday).....

for us peons, not a bad return, I'll won't sneeze at a quick +10% gain.....

http://finance.yahoo.com/news/IBM-cuts-Sun-Micro-offer-to-rb-14851296.html

[afxm]

To me 9.60 seems too low, sun will be @ the 9.60 level in 3 months or less w/out a buyout offer from big blue. I'm thinking $10.60 or more @ a minimum, let em' pay a premium for sun's server business + technology if they want it now. Not later. :)
afxm

[MorningLightMountain]

Latest word is $9.60 per share, so I'm buying JAVA here at 8.40.....seems like a no brainer....

[afxm]

By: Reuters | 25 Mar 2009 | 05:29 PM ET
Intel Corp. [INTC 14.94 -0.06 (-0.4%) ] Chief Executive Paul Otellini said IBM's [IBM 97.95 -0.35 (-0.36%) ] discussions to acquire Sun Microsystems Inc. [JAVA 7.85 -0.21 (-2.61%) ] are likely to succeed for one ringing reason: Money Talks.


Paul Sakuma / AP
Sun Microsystems's headquarters in Santa Clara, California.
---------------------------------------------------------------
During a chat with Intel employees on Monday, Otellini said it is no surprise International Business Machines Corp's interest in the high-end computer maker comes in the wake of a plunge in Sun's stock price.

"I can tell you that Sun was shopped around the valley and around the world in the last few months," Otellini said in comments detailed on Wednesday in a filing with the U.S. Securities Exchange Commission.

"A lot of companies got calls or visits on buying some or all the assets of the company. It looks like IBM is in the hunt now. And at a hundred-and-some-odd-percent-premium, I suspect they'll get it."

IBM is offering to pay as much as $8 billion, or $10 to $11 per share, The Wall Street Journal reported last week. That compared with Sun's share price of $4.97 before the IBM talks were reported. The stock closed at $7.85 on Wednesday.

Sources with knowledge of the matter told Reuters IBM was in exclusive talks with Sun and IBM was examining Sun's businesses as part of a due diligence process.

Sun has long been cited as a takeover target for IBM, Hewlett-Packard Co. [HPQ 31.01 0.39 (+1.27%) ], Dell Inc. [DELL 10.17 -0.24 (-2.31%) ] or Cisco Systems Inc. [CSCO 16.59 -0.09 (-0.54%) ], which introduced a comprehensive set of data center products early last week.

Asked if Cisco's entrance might have spurred IBM to make a move on Sun, Otellini said: "I don't think it had anything to do with Cisco.

"I think cheap Sun price -- a low price -- spurred a lot of interest," he said, according to the filing.

Before the reports of IBM's interest, Sun's shares were down more than 70 percent in the previous year.

Still, Intel's CEO said he could see how IBM could benefit from the deal.


RELATED LINKS

Current DateTime: 02:52:45 25 Mar 2009
LinksList Documentid: 21422835
Top Technology News
Tech Check with Jim Goldman

"I think IBM is trying to consolidate architectures," he told Intel employees. "IBM has the strongest Java license in the industry. By picking up Sun -- which is the creator of Java -- they really consolidate their position not just in Linux, but also in Java."

In the end, Otellini remained unsure how he felt about a potential marriage of IBM and Sun, a deal that would combine the world's No. 1 and No. 4 makers of computer servers. Intel counts both IBM and Sun as customers.

"Is it good or bad for us? I don't know," he said. "I'd rather have Sun be independent I guess."

[NovoMira]

A bidding war! Oh yeah... wouldn't that be wonderful!!! Here's the rumour of the day...

Technology Rumor of the Day: EMC

Scott Moritz 03/23/09 - 08:49 AM EDT

Hey EMC (EMC), it seems Cisco (CSCO) just isn't that in to you.

As merger speculation heated up last week, EMC was often named as a big potential takeover candidate and fix for any company looking to join the new game in IT networking. But as the dust settles, EMC is looking increasingly like a stand-alone.

The excitement started March 16 with Cisco's partnership-powered attack on Hewlett-Packard's (HPQ) and IBM's (IBM) server businesses. This move may have sparked the still-unconfirmed merger discussions between IBM and Sun Micro (JAVA).

Networking specialist EMC once was the answer to the question of how a big IT gear supplier could gain a prime spot in the data storage market. But EMC's days as a buyout target may have since passed. Apparently, Cisco got very close to a deal with EMC a year and a half ago. Then it walked away. "They almost pulled the trigger 18 months ago," says a former Cisco executive. "But both sides had different notions of the integration task and the management structure."

EMC, and its spinoff virtualization business, VMware, were among the players named in Cisco's somewhat vaporous server partnership initiative. The idea that HP would swoop in for a try at EMC doesn't quite stand up, says Telecom Pragmatics analyst David Gross. "HP already has its own storage products," says Gross. "EMC can continue to do what it's doing as an independent storage company."

Meanwhile, says Gross, VMware, which has software used by nearly every major company, could be seen as a more attractive buyout option.

Maybe that's a rumor for another day.

[afxm]

Oh Yeah, "start a bidding war for Sun.” That's what I want to see ! :) GLTA, afxm

[NovoMira]

Sun Microsystems may shine in Big Blue sky

Atlanta Business Chronicle - by Mary Duan

For Sun Microsystems Inc., a reported $6.5 billion acquisition offer from IBM Corp. is being called a "Yahoo moment."

The company may be worth more than IBM (NYSE: IBM) is offering, but it also may be more money than Santa Clara, Calif.-based Sun (NASDAQ: JAVA) will be worth if IBM walks away from the table. Officials of both companies have yet to confirm that acquisition talks were under way.

News of the offer came as competition for data center hardware is heating up and "Big Blue’s" offer is seen as an attempt to respond to San Jose, Calif.-based Cisco Systems Inc.’s (NASDAQ: CSCO) announced plans that it would enter the next generation data server market. With the move, Cisco is poised to take on Sun and Palo Alto, Calif.-based Hewlett-Packard Co. (NYSE: HPQ).

Sun “is having a Yahoo moment,” said Rob Enderle, a veteran technology analyst and principal of San Jose-based Enderle Group. The reference is to Microsoft Corp.’s (NASDAQ: MSFT) attempt to buy Yahoo Inc. (NASDASQ: YHOO) last year. But unlike Yahoo’s fierce fight to remain independent, Sun has reportedly been actively seeking an acquirer. “If they walk away from this deal, they could bid it up,” Enderle said. “HP might now find Sun attractive because IBM wants it… this could start a bidding war for Sun.”

Sun has taken a beating in recent years. Its server was favored during the dot-com era, but the company found its products being sold at bargain basement prices following the bust. Its servers are considered to be of the highest quality, and their prices match that reputation.

But concern about Sun’s viability has been heightened by the battering of the financial services markets, which long have gravitated toward the power and scalability of Sun’s servers. The $6.5 billion IBM is said to be offering was about double what the company market cap was worth the day before the acquisition talks were reported, but less than half what the company was worth a year earlier.

Owning Sun’s Java open-source platform would also give IBM a competitive leg up in an arena where Web capability is key. “With Cisco entering the server space, (IBM) has been put on notice to double-down and aggressively compete against Cisco,” Enderle said. “IBM also is positioning against Microsoft, because if you have the more largely used tools, you have the competitive advantage.”

Faysal Sohail, managing director of San Francisco-based CMEA Capital, a venture firm with a large investment in software as a service — or SaaS — and data center technology, called cloud computing “the holy grail” for the data centers market. With HP acquiring assets on the networking side, and Cisco now going after the server side, IBM represents the final company of the trinity racing to become market leader. “This has been a long time coming. IBM has servers and services, but not the software platform, and no networking,” Sohail said. “The way the landscape is shaping up, you have these three major players going after cloud computing, and they’re all trying to add pieces to be competitive.”

By acquiring Sun, IBM could add the critical parts it lacks with Sun’s open-source Solaris operating system, the open-source database MySql and the Java platform. By doing so it could become the leader in cloud computing. “They’re missing the networking part, which is what Cisco provides,” Sohail said, “but HP, Sun and IBM are off to the races.”

At Fusion Storm, one of the country’s largest resellers of Sun and IBM products (and the largest IBM reseller in the federal government sector) Chief Technology Officer Vince Conroy said the possible acquisition would be great news for Fusion and great news for customers of both companies.

Fusion, based in San Francisco and with 22 offices, including Santa Clara, said the acquisition has the potential to end Sun’s struggles and give IBM access to great open-source technology. “Obviously we don’t know what the road maps or merger might look like, and if it does come about, it will take awhile to unfold,” Conroy said. “But it gives the combined companies dominance in the midsize server arena and great crossover market share.”

Conroy disputes the theory that Sun has priced itself out of the marketplace for new and emerging companies in need of servers. He said Fusion has several large Web 2.0 companies buying a large number of Sun servers, adding that Sun has competitive pricing in the data center server space. “I don’t think it’s accurate to say they’re not price competitive. In certain markets maybe, but it is a highly competitive market between HP, Dell and Sun, and that market is increasing,” Conroy said.

As talk about the possible acquisition took on fervor, questions about possible antitrust issues surrounding the deal also arose. San Jose analyst Enderle said he doubts an antitrust case would proceed. “Microsoft could move to block it, but I doubt they would because they’re under too much of a cloud themselves,” Enderle said. “If Google was trying to do it, then they might” seek court intervention.

[afxm]

DJ Sun Microsystems Up On Reports Of IBM Buyout Talks
By Aude Lagorce,
"If the deal is finalized, it would be the largest purchase ever for Armonk, N.Y.-based IBM - and would amount to a 100% premium over Sun's closing price of $4.97 a share on Tuesday."

That's 9.94 per share, I thought that I read the initial offer was $8B,
Guess we'll have to wait and see. The deal will give ibm a 40% share of the server market according to the article above. GLTA, afxm

I thought this board would be alive....It should be !

[anavar10]

u guys see the march 6 calls...up 30,000% today

[NovoMira]

Sun shares soar on report of IBM deal talks (AP)

Wed Mar 18, 2009 10:25AM EDT

NEW YORK - Sun Microsystems Inc. shares soared Wednesday after a published report said International Business Machines Corp. is in preliminary talks to buy Sun for at least $6.5 billion in cash. The Wall Street Journal, which cited unnamed people familiar with the matter, said the deal could occur as early as this week. It also said the talks could fall apart.

Sun Microsystems shares climbed $3.20, or 64 percent, to $8.17 in morning trading, while IBM lost $1.77, or 1.9 percent, to $91.14.

IBM, of Armonk, N.Y., and Sun Microsystems of Santa Clara, Calif., both make computer systems for corporate customers, and the newspaper said a purchase of Sun would help IBM in the finance and telecommunications markets.

An IBM spokesman did not return calls seeking comment Monday morning. Sun spokeswoman Karen Kahn declined to comment. While some of their technologies and customers overlap, IBM and Sun have been heading in different directions for most of the past decade.

Sun, a darling of the dot-com era, has been struggling since the tech bust of 2001 to find its place. The company has cut thousands of jobs and tried to refocus on open-source software besides the proprietary systems it built much of its wealth on.

IBM, after an enormous restructuring in the 1990s, has proven one of the technology industry's most reliable earners. It has gobbled up dozens of companies in recent years. But a $6.5 billion deal would be its biggest to date. It also would represent a big premium for Sun, which closed trading Tuesday with a market capitalization of less than $4 billion.

[Hawkeye_tt]

And a BIG thanks to CISCO for getting the Ball rolling.....long
over do. IMO
Now HP and DELL may play in the Bid......Some ibm FUN TODAY.

Hope all picked some up in the 2's back a bit.

GLA

Hawk

[BooDog]

http://www.sun.com/

[BooDog]

WAS a nice pincher earlier this month eh?

[BooDog]

[BooDog]

Sun Microsystems, Inc.(NasdaqGS: JAVA)
After Hours: 3.80 0.02 (0.52%)6:22PM EThelp
Last Trade: 3.82
Trade Time: Dec 26
Change: 0.00 (0.00%)
Prev Close: 3.82
Open: 3.71
Bid: 3.00 x 200
Ask: N/A
1y Target Est: 5.34
Day's Range: 3.70 - 3.85
52wk Range: 2.60 - 18.59
Volume: 1,974,742
Avg Vol (3m): 13,051,300
Market Cap: 2.82B
P/E (ttm): N/A
EPS (ttm): -1.75

[chipguy]

So much for Sun's one bright spot, Niagara.

Two socket Nehalem Xeon completely crushes all opposition
in SAP-SD benchmarks

http://www.sap.com/solutions/b...k/sd2tier.epx?num=20

2s/8c Nehalem Xeon x5570 (2.93 GHz) - 4995 users
2s/16c Niagara 2 T5250 (1.4 GHz) - 4170 users
2s/8c Shanghai K10 2384 (2.7 GHz) - 2752 users
2s/8c Harpertown Xeon x5470 (3.33 GHz) - 2518 users
2s/4c Power6 p570 (4.7 GHz) - 2035 users

Of course a two socket Xeon box will sell for far less than
what Sun has been charging for two socket T2 boxes and
the Xeon box is fully general purpose and is good for any
type of workload (it gets more throughput with 16 threads
than T5250 gets with 128 threads).

[Hawkeye_tt]

Early rumor..........

[chipguy]

Dell?

I think Sun would have to end of life SPARC before Dell would
buy them just like Compaq had to EOL Alpha before HP would
buy them.

[Hawkeye_tt]

DELL rumor......

[chipguy]

Can Sun Microsystems Save Itself?

http://www.serverwatch.com/eur/article.php/3788631

Who will Sun belong to in 12 months time?

[Hawkeye_tt]

Clunk again !

[chipguy]

Sun continued to lose both revenue and unit market share in Q3.

http://www.gartner.com/it/page.jsp?id=823712

YoY, Sun went from 10.0% to 9.1% revenue market share and
from 3.6% to 3.5% unit market share. Ouch!