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Sun Microsystems The Almighty Buck

Available To The Right Buyer: Sun Microsystems 489

antediluvian writes "The Seattle Times reports Sun Microsystems shares surged forward on speculation the computer maker may be bought by a rival company. Prospective buyers could include Dell, IBM or Hewlett-Packard. Computer sales of rival companies have been outpacing sales of Sun's machines. Over the past three years Sun's stock has declined 92 percent."
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Available To The Right Buyer: Sun Microsystems

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  • what about N1? (Score:5, Informative)

    by (562495) on Sunday May 04, 2003 @09:14AM (#5874151) Homepage
    N1 is a new IT architecture from Sun. I think it is awesome new technology/architecture, but I also think there is no market for that currently. N1 was in wrong place at the wrong time. There are lot of other things that need to be done before N1 can be implemented anywhere.

    What will happen to N1 after the acquisition? IBM already has a similar product callled Tivoli. If IBM purchases Sun, N1 will either be slashed or integrated into Tivoli. Any thoughts on that?
  • Re:what about N1? (Score:4, Informative)

    by (562495) on Sunday May 04, 2003 @09:21AM (#5874179) Homepage
    link to N1 N1 []
  • NEWS for nerds? (Score:5, Informative)

    by elmegil (12001) on Sunday May 04, 2003 @09:31AM (#5874221) Homepage Journal
    More like RUMORS for nerds.

    An institutional buyer made a large purchase of Sun Stock. That fueled rumors about a buyout, but it seems a lot more likely that after reporting (admittedly very modest) profits in the last quarter and one analyst recently shifting Sun to buy, some institutional buyer wanted to get some "bargain" stock that they think will appreciate well in the coming years. Given how steady the stock price has been between 3 & 4 dollars, it does seem likely that it's bottomed out, so unless you think Sun is imminently going out of business (which I sure don't) this kind of buy seems to make sense more from that standpoint than from any bs about being bought by a bigger player.

    As far as it goes, Sun's culture is so antithetical to IBM and to the "new" HP that I can't see either of them wanting to take Sun on....

  • by ChrisRijk (1818) on Sunday May 04, 2003 @09:34AM (#5874235)
    Sun's Rise Likely From a Trade, Not an Offer []

    • At UBS Warburg, Jack Francis, co-head of equity trading, said the sudden surge in price followed a 5-million-share block trade, considered to be a very large buy by Wall Street standards. "That was spurring stories of a potential takeover, which doesn't make any sense at all but did add fuel to the upside," said Francis. "The rumor doesn't hold a lot of weight, but in a market like this it gets people off the fence who are looking for any story that could generate alpha."

    Anyway, Sun are currently valued at $12Bn, and have $5.5Bn sitting in the bank.
  • Re:what about N1? (Score:5, Informative)

    by nemaispuke (624303) on Sunday May 04, 2003 @09:34AM (#5874236)
    Tivoli cannot do the same things as N1, unless IBM has added some amazing tweaks to it that nobody knows about or uses. N1 allows a data center to manage its resources based on business rather than technical requirements. The example that was given to the local Sun User's Group meeting was say your web site was being hammered by requests (Christmas). By using the console and selecting the appropriate options, you could do the following: 1. Reallocate bandwidth 2. Build and deploy new web servers to meet the demand (provided you have the hardware available) This is done with one person, not a team of system, web, and network administrators. Most of the technology to support N1 is already in Solaris (Resource Manager, Live Upgrade, Solaris Flash, JumpStart). I don't know about you, but I can find plenty of uses for N1, and companies wanting to shore up their bottom line can as well. IBM and HP are also working on similar technologies, but Sun is farther ahead and has made purchases of companies that have technology Sun needs (Sun purchased a company to get the "provisioning engine" technology for N1). If N1 actually works (and to me it does), there will be a huge change in how data centers are managed. And a lot of IT people could potentially be out of work!
  • Re:what about N1? (Score:3, Informative)

    by (562495) on Sunday May 04, 2003 @09:59AM (#5874345) Homepage
    Actually I think Tivoli and N1 are very similar product. Both of them allow bunch of hardware to be managed as a single resource rather than inidividual server/equipment. This is done using grouping of hardware into single resource, and then running agent to monitor them.

    offcourse the internals/specific of the 2 products are different, otherwise both of them will be suing each other.
  • by rpiquepa (644694) on Sunday May 04, 2003 @10:00AM (#5874348) Homepage

    These kinds of rumors are a recurring phenomenon in this industry. Check for example "When will IBM buy Sun? []" which is over a year now.

    Sun has a market capitalization of around $12 billion (at its current stock price of $3.75).

    To buy it with a good premium would mean a huge investment.

    And considering that Sun always stands alone and that its products -- hardware as well as software -- are not really compatible with the rest of the industry, anyone who would buy Sun would only buy its customers. But for how long?

    Sun customers are among the most loyal ones.

    And you can believe me: I was working for one of its competitors.

  • Re:Stock prices (Score:3, Informative)

    by Reziac (43301) on Sunday May 04, 2003 @10:03AM (#5874367) Homepage Journal
    TECH stocks fell like rocks, yeah.

    But some of us have core stocks in other areas.. and the average hit has been about 35%. Unless you're lucky enough to own Borg-Warner, Proctor & Gamble, or a few others of like ilk.. they're worth more now than they were before the stock market's big adjustment back to reality.

  • by Ewan (5533) <ewan.longwords@org> on Sunday May 04, 2003 @10:13AM (#5874422) Homepage Journal
    While I hate to say HP-UX is a good OS, it is certainly an OS which runs on Itanium and supports 64 processors.

    The new HP Superdome machines with Itanium2 are more powerful CPU-wise than anything Sun makes at the moment.

  • by n3rd (111397) on Sunday May 04, 2003 @10:24AM (#5874473)
    Here's what people don't understand: When it comes to SPARC it's not about pure Mhz, it's about being efficent.

    Check out the SPEC scores. SPARC 1.2 Ghz have the same score a Pentium 4 2.4 Ghz. We all know about lies and benchmarks, but it seems to show that Mhz isn't the whole story.

    The other thing people miss is the future. I would suggest checking out this article [] about Niagara. If Sun pulls this off, it will be *huge*.

    I don't see Sun being purchased anytime soon or at least not in any kind of a mutual agreement. They have plenty to keep going for, both currently and in the future.
  • by Anonymous Coward on Sunday May 04, 2003 @10:31AM (#5874513)
    Face it. Sun sucks. Period.

    I've been working with Sun Solaris and Sun SunOne products for the past two years and I have to say I've NEVER gotten worse support from ANY company (yes, even Microsoft, and their support sucks ass).

    Example. The person maintaining our Enterprise 220R before me was vary lax about applying patches to the OS. So, I go in to try and clean up and find out there are neary 300 patches to apply after a year and a half with no cumulative patch at all! So, I hunker down and start reading the readmes for all the patches that need to be applied. (I got the list from their ridiculous PatchPro Java app. Just the fact that there is no progress indicator to tell you if it's crashed or still running or what is ridiculous.) I find that some of the patches require downtime. OK... I can schedule that. What else? Some of the patches say that they may actually make the machine non-bootable if incorrectly applied. ! So, I finally call Sun for support on trying to apply the patches. What do they tell me? "Do you have a test box?" Do I have a TEST box!? Fuck no! Why should I need to run a test box for every Sun server I have? To make Sun more money? NO thank you!!! So I decided to say screw this and just procede with upgrading our SunOne Messaging server even though the OS isn't patched, then I'll give the OS a shot later. When I talk to SunOne support, they say, "Do you have a text box?" !!!!!? WTF?! I tell them that I don't. They say, that I can try to do the upgrade but I would be much better off with a test box. I ask them how much downtime can I expect if I apply all the Sun Solaris OS patches and SunOne Messaging patches. They gave me a quick run down and I can expect up to 36 hours of downtime!!! Again I say, W-T F!!!!?

    After some discussion with my supervisors, we determine that we wil buy a new box to install a newer version of Solaris and the SunOne Messaging server. I do this. Then I call support to find out how I move mail and users from one box to another. They give me a ton of bizarre and very byzantine approaches to do the same thing. Each tech tells me something different which invalidates what the previous tech told me. As I progress, I get to learn to hate Sun more and more and more. I know it's an alternative to M$, but goddamn!!! In the end, I start to feel that I'd be better off if would just research some open source projects and learn all the little inconveniences they bring considering that al of Sun's products feel like really bad alpha level software. So you can just surmise that I H-A-T-E Sun. Considering the amount of money they charge us for support, I'd really love to see some good service, but this is never going to happen. It just seems that Sun's main philosophy is to work with one hand tied behind their back, one eye missing and the other looking at everything through a prism and a mirror and then learn to cope with it. I for one won't be sorry to see these assclowns disappear.

    Fortunately, I've convinced my bosses to NEVER buy another Sun product again. We're an OpenVMS shop with a legacy app that is being ported to Solaris and HP-UX. The company that owns that legacy app really wanted us to go the Sun route, but we chose HP-UX because we are a Digital/Compaq shop. I will be glad to see those HP-UX boxes come in. Fuck Sun.
  • Re:This is sad (Score:3, Informative)

    by nbvb (32836) on Sunday May 04, 2003 @11:02AM (#5874644) Journal
    And their machines are just perfectly engineered. Any box that I've been inside of, I never thought "Why the hell did they put that there?".

    Then you've never had the uhm, privilege, of working on an Enterprise 450. What a piece of SH.T. If the server works, it works fine, but if it breaks, you're going to end up bleeding trying to fix it.

    What a mess.

    And I guess you've never had to replace 500+ CPU's due to the e-cache problem.

    Or replace PCI backplanes on SF15k's.

    Or replace CIC1 E10k system boards with CIC2 boards.

    Or replace faulty I/O mezzanines.

    How about the infamous Vixel GBIC incidents?

    Or the bad rev-01 and rev-02 UDWIS/S SCSI cards?

    Or the A5200 can't-multi-initiate-because-the-array-will-random ly-hang-without-new-disk-firmware problems?

    Or the A3500 controller-thinks-it-failed-so-you-just-replace-it -with-itself-and-then-it-works problems?

    No, I'm sorry, Sun stuff is NOT perfectly engineered.

    Not that I'm bitter or anything ....
  • by alacqua (535697) on Sunday May 04, 2003 @11:10AM (#5874678) Homepage
    Everyone's stock fell around 92% in the past three years.

    IBM current stock price: about $85
    IBM current stock price times 10: about $850
    Unless IBM was at $850 three years ago, it hasnt even dropped 90% (BTW, IBMs all time high is around $135-$140).

  • by Anonymous Coward on Sunday May 04, 2003 @11:13AM (#5874699)
    OpenVMS, the world's most stable operating system, will be running on a cluster of itanium processors with fault-tolerance and fail safe capabilities built in.
  • by Sulka (4250) <> on Sunday May 04, 2003 @11:38AM (#5874824) Homepage Journal
    Sun just recently went a long way towards competitive price/performance with the introduction of Fire v210 [] and Fire v240 [] servers. If you configure an x86 server with similar capabilities, you'll find the Sun price to be very good. Hardware RAID and multiple gig-ethernet adapters isn't that common configuration in a sub-$3500 server.
  • by Anonymous Coward on Sunday May 04, 2003 @11:54AM (#5874904)
    As a Sun employee, I really hope this is just a rumor and stays a rumor. When Sun merged with AOL via Netscape and then formed iPlanet and then seperated from AOL and Netscape, things were a mess for a couple years and then some. People who should have stayed were let go. Horrible changes in policies (for employees at least) were made... it was just suck all around.

    I love working for Sun and I love doing what I do and always imagined I'd be working there for another decade or two at least. If a new ownership means getting laid off no thanks!
  • by sysjkb (574960) on Sunday May 04, 2003 @11:56AM (#5874916) Homepage
    Sun's market cap. is 11.9 billion dollars.

    Apple's market cap. is 5.82 billion dollars, about half that of Sun.

    There are certainly advantages to technology deals between the companies -- both use openfirmware , after all. Rumor even had it that inside apple native versions of MacOS "classic" were built and running on SPARC hardware, and Sun released a version of Solaris 2.5.1 that ran on PowerPC. But I see a merger as being unlikely. Although Quartz on Solaris would be fun!

    If Sun is going to be bought, the only deal that makes sense to me would be a purchase by Fujitsu. I can't see Sony jumping into the server business, nor Dell going mano-a-mano with Microsoft.

    Sincerely yours,
    Jeffrey Boulier
  • Re:You are wrong (Score:2, Informative)

    by Squareball (523165) on Sunday May 04, 2003 @12:21PM (#5875040)
    You only show your arrogance when you say that Java sucks ass. Java is VERY powerful on the server-side.
  • by Paul Jakma (2677) on Sunday May 04, 2003 @12:58PM (#5875205) Homepage Journal
    Apple (well NeXT) solved that problem already. OpenStep (cant both to capitalise it correctly) ran on both 68k and x86 machines, and OpenStep software could be compiled to be 'fat', ie including both 68k and x86 machine code so it could be installed and executed on either architecture. Wasnt very popular, but disk space wasnt as cheap in those days as it is now.

    Apple must still have that code lying around somewhere.
  • Re:Apple... (Score:5, Informative)

    by bob_dinosaur (544930) on Sunday May 04, 2003 @01:21PM (#5875291)
    I don't think you really understand Sun's core business. It's got nothing to do with the desktop and everything to do with servers.

    Sun is hurting because now I can replace my low-end and midrange boxes with commodity x86 kit running Linux for about 10-15% of the cost.

    At the mid-to-high-end (16+ processors) Sun is still viable and a good choice (I haven't seen good Intel kit that scales over 8 processors), but the volumes in that market probably aren't enough to sustain the required R&D effort, especially as Sun's consulting business - which would push their kit - isn't great. Still, I like our E10000s... they do the job we ask of them pretty well.
  • Re:Apple... (Score:3, Informative)

    by christophersaul (127003) on Sunday May 04, 2003 @01:42PM (#5875453)
    Sorry, Slashdotters, but this perception that the equivalent Intel box is 10-15% of the price is utterly ludicrous. Have you seen the prices of the 210s, 240s and up?
  • Re:stock (Score:3, Informative)

    by wass (72082) on Sunday May 04, 2003 @05:01PM (#5877007)
    Unfortunately, you've hit the nail right on the head, both legally and financially. I realized this when my friend, who was a business major back in our undergraduate days, related how a publically-traded company's ethical priority is it's shareholders.

    He put it like this. A company cannot ethically spend money that won't, in some way, help out these shareholders. For example, if employee Joe Blow's wife needs an operation, the company can ethically pay for it because it would most likely improve Joe's ability to work for the company, and hence the shareholders. However, suppose Joe was retiring after a good 50+ years of devotion to the company. They might decide that there's no benefit for the shareholders if they spend this money for Joe. However, it's not fully cut and dry like this, one could argue other employees' morale could be improved seeing retiring Joe get helped out, hence benefitting the shareholders. Anyway, it turns out that said shareholders are ultimately THE BOTTOM LINE.

    Shareholders can, and often do, sue companies that make bad financial moves that don't hurt them. For example, I own a few meager shares of VA Linux that I bought back in the day. After the stock market plunge, I got letters in the mail from cla$$-action lawyers wanting to take part in a class-action suit against VA because their stock dropped so much. The investors thought it must have been VA's business model which didn't adequately take the shareholders interests into account (of course, it was primarily silly businessmen trying to buy into this hot-topic called linux that they didn't know much about but heard was a great investment). I declined to take part in the class-action suit (I wouldn't have gotten more than a few pennies anyway).

    The point is, most companies aim for maximizing profits. Private companies can do whatever they please, but public companies must do everything possible to maximize profits for the shareholders. It is usually argued that improving product quality improves sales, which gives the most $$$ to shareholders. But quite often large-volume sub-quality sales can outpace smaller-volume higher-quality sales in terms of shareholder benefits. So, voila, your observation becomes a rather standard practice.

    Back before the bubble burst, I worked at a national lab (MIT Lincoln Lab) and saw many people leaving to join the ranks of rich private engineers. Specifically, the Optical Communications group fell apart as everybody fled to various startups to make their fortunes. One such startup offered engineers about 10k shares of stock, which eventually sold for $300 within a few days! Overnight multi-millionaires. Of course, the stock has plunged, along with many others. So many of these engineers have found themselves out of work, sometimes with large home mortgages they cannot afford. [Lesson - make sure if you buy a house you're not dependent upon expected stock prices, otherwise you can find yourself really screwed.]

    But the point of making a company public is to get ALOT of funding when the company is rather young, so it can buy enough resources to adequately compete in the marketplace (ie, for this company to buy lots of ultra-fast optical and electronic equipment, along with attracting the top-quality engineers, etc). However, after this, they have to perform for their stockholders or else all hell breaks loose.

    Contrasted with a private company, like LEGO. Less startup money and also venture capitalists will probably not want to invest in private companies as much as public ones. However, once they start making it, they can do whatever they want with their profits that they please. They also don't have to publish all the information that publically-traded companies have to do, etc.

    So in the short run, it's most likely worth it to be public. But if you think your company really has an excellent long-term business plan and can keep sales volume high, it could be worthwhile to stay private.

    [Caution, I'm a physicist and know very very little about business so I'll probably get schooled here by various MBA's, etc. But that's my take on the situation.]

Be careful when a loop exits to the same place from side and bottom.