Sun and Clouds

In a month that saw Sun showcase the Sun OpenCloud Platform, that cloud computing giant (or just make that computing giant!) IBM was rumoured to be in talks to buy Sun. So, how would such a merger benefit Sun’s or IBM’s customers and shareholders?

Before I answer that question, let’s briefly look at the Sun Open Cloud Platform, the company's open cloud computing infrastructure. It’s powered by Sun software such as Java, MySQL, OpenSolaris, and Open Storage. Sun plans to offer public clouds and gave a preview of plans to launch the Sun Cloud, which is targeted at developers, students, and start-ups, and is Sun’s first public cloud service.

Cloud computing, as I’m sure you know, is a way of making resources available as a service over the Internet. IBM has nine cloud centres (Cloud Labs) around the world. One is on an industrial estate just outside Dublin in Ireland, one in Silicon Valley, one in South Africa, a customer centre in Qatar, plus Bangalore, Hanoi in Vietnam, and Beijing in China. Internally, IBM has its own cloud system called the Technology Adoption Program.

IBM has been selling Sun’s Solaris operating system on its BladeCenter servers. And a little while ago, Sine Nomine Associates, with help from IBM and Sun, demonstrated OpenSolaris running on a System z mainframe. This illustrated little more than the symbiosis of companies trying to sell product. But now, according to a figure published in the Wall Street Journal, IBM is offering $6.5 billion to buy Sun Microsystems.

Sun may be worth more than investors think, particularly to IBM. Remember that Sun bought StorageTek back in 2005, and more recently bought MySQL – the open source alternative to Microsoft’s SQL Server (certainly a much more viable alternative than DB2). Sun’s first quarter has been a bit of a disaster, losing $1.7 billion and announcing 6,000 employee lay-offs. The $6.5 billion is almost twice Sun’s market capitalization, but half its total revenues for the last financial year. So, it might well be worth the money to IBM.

I’m sure the shareholders in both companies are going to be fairly happy about the deal. IBM’s customers get StorageTek’s storage equipment as another option from IBM – that all seems good. Solaris customers might be converted into mainframe customers – although that scenario is probably one for a parallel universe.

Sun Microsystems’ customers might not be quite so gleeful. What’s IBM going to do with Java and perhaps more importantly the Java community? We’ll have to wait and see. What’s IBM going to do with MySQL when it already has DB2? I would guess they will push it as the Open Source Microsoft SQL Server killer, but who knows? Perhaps users in the future will be offered an upgrade path to DB2?

Perhaps the real problem is going to be with customers of Sparc processors. These clearly duplicate IBM’s own processors. Will customers have to buy BladeCenter Servers? Will they be pushed towards AIX?

As the old Chinese curse has it: we live in interesting times.