Sun rises on talk of IBM deal. Good for Linux?
Beleaguered Sun Microsystems, whose share price has been languishing at one of its lowest points ever for the past year, has just been given a shot in the arm with yesterday’s talk of an IBM buyout. A couple of weeks ago I wrote about how Sun’s share price gave the company a market capitalisation only slightly larger than that of Red Hat, despite revenues 20-fold more than those of Red Hat. At the close of the NYSE on March 17 Sun’s share was trading at $4.92. With the overnight news of a potential IBM buyout that price rocketed to open at $8.31 yesterday, eventually closing at $8.94. Which gives Sun a market capitalisation of more than $6.6 billion. But is it good for Linux and open source?
Clearly the market likes the idea of IBM snapping up Sun but would such a deal be good for open source and Linux? It’s hard to say but there are many advantages in such a deal. For a start, despite its heritage as a hardware vendor, Sun’s future looks certain to lie in open source software, even though it is finding it incredibly hard to make that transition. Sun owns some very valuable software properties including Java, MySQL and VirtualBox, items that IBM could well monetise if it could get its hands on them. And in doing so it might well preserve and grow these properties.
IBM’s Websphere product also already uses Java extensively and it would make sense for IBM to acquire that. There is also potential for Sun’s MySQL database as a possible replacement for IBM’s flagging DB2, which could see the open source database extend its reach, with positive knock-on effects.
Of course, Sun is also a custodian of the OpenOffice project, and with Sun looking likely to suffer a slow and lingering death, it would be nice to know that OpenOffice was in good hands for the next few years. Which we hope IBM will be.
Despite obvious overlaps between Sun and IBM (both have hardware, a Unix and a database) the biggest potential advantage is the possible consolidation of around Linux servers. Both IBM and Sun have strategies in place for this already and a consolidated effort could give Linux a serious boost.
Having said that, there are still many questions and disadvantages in such a deal. As Dana Gardner argues, “by buying Sun, IBM gains little other than some intellectual property and MySQL”.
There could be many advantages for open source and Linux if such a deal was to go through, but the jury is still out. What effect do you think the deal could have? Leave your thoughts in the comments.