Monday, November 24, 2008

Microsoft to buy SUN

Combine poor market conditions, SUN's stock price free-falling, Microsoft's desire to break into the enterprise market and you can imagine this acquisition actually happening. The fact is there are some compelling arguments to buy SUN at this point. SUN is obviously in a bit of trouble right now, their market cap is currently less than their annual revenue. That is free money for an acquirer. Schwartz has bet the farm on a long term open source strategy and while I think this is bold and commendable, it is not well suited to the current climate; nervous shareholders need to see results before 2014. It's already likely SUN will spin off some parts of their business (read: hardware) to reduce the staggering amount of cash they are burning through, but that will only go so far, SUN may need to make more drastic changes.

If Microsoft took control of SUN I think we'd see some big changes across the board. Microsoft would inject some much needed shorter term strategy, and a lot of marketing muscle that SUN desperately needs. I think they would systematically lop off all the random projects that SUN don't make money from including Open Office. OpenSolaris, MySQL and SUN's virtualization platform would be safe.

Of course this would mean that Microsoft owned JAVA. That's a pretty alarming thought. I was on a panel a couple of days ago where I contested the value of open sourcing the JDK for the end user. However, with possibilities like this I stand corrected, open sourcing the JDK was the way to go. Even though Microsoft wouldn't screw with it, you can bet there would be a huge push back form the JAVA community. I chose Java 10 years ago to get away from Microsoft's wacky APIs and brainwashing (ironic really), I can't help be feel others like myself would be pretty uncomfortable with this.

The end result would be Microsoft having a credible enterprise story, with a business to back it up. they would also (to some degree) control the mind-share of two of the biggest developer communities, Java and .NET. There would bound to be objections from other vendors on monopolization, but since the market share and products of the two companies don't actually overlap too much these objections may be difficult to defend. Scary thought.

10 comments:

Neil Bartlett said...

If MS wanted to do this, it would almost certainly have to be a hostile takeover, and I'm sure Sun has a variety of defences against that.

In fact their biggest poison pill has, in a sense, already been ingested. The fact that most of Sun's software assets are already open source under the GPL would at the very least give MS indigestion.

Still, Java has always been bigger than Sun, so it's not going to disappear even if MS bought Sun with the intention of killing it. The rest of the community would need to step up and fill the void, and there would be some big changes, but some of those changes are long overdue anyway.

scotartt said...

I would look to one of the two remaining big vendors that both rely heavily on Java ... IBM or Oracle. Probably the latter, they don't have a hardware division, and beyond just Java itself, some of the apps that Sun have, Oracle could use, although they may just sell those parts of the business off.

Martin Wildam said...

I am trying to get out of the realm where Microsoft has influence on and you tell such horrible considerations.

If this become true I will change back to pen and paper as it then will remain the only effective tool. ;-)

Ross Mason said...

Neil, Agreed that JAVA is definitely bigger than SUN, but the thought of another vendor "owning" the language is a little uncomfortable. Maybe, the language should be standardized (in the same way C was) but that usually means that there will be less innovation in the language itself.

Ross Mason said...

Scott, IBM and Oracle are the obvious choices, but I'm not sure either one is 'better' than Microsoft (If I had to chose, I'd go with IBM). Lets hope it doesn't get that far.

Ross Mason said...

BTW there is an interesting post from Tim Bray on What SUN should Do. I agreed with quite a bit of this post.

alexis said...

Arguably SUN don't have an enterprise story, so MSFT wouldn't be buying one.

I thought Kirk Wylie had it about right re Tim Bray's blog post: http://kirkwylie.blogspot.com/2008/11/tbray-response-sun-should-stop-sucking.html

Cheers, alexis

Ross Mason said...

Alexis, that's a nice dose of ouch :). I've said it many times before, SUN's messaging does indeed suck, so you wouldn't be buying the story, but you would be buying all the bits to build a compelling story. The problem is SUN has never been good at positioning themselves, I think Oracle, IBM and even Microsoft could make a lot more out of SUN than SUN can themselves (as they have shown time and again).

James Ward said...

Hi Ross,

It was fun chatting about this possibility with you QCon. One other side effect I realized... MS could also screw Java on Apple computers.

I really don't see any reason why MS would NOT do this. I don't think the DOJ would stop it. But as Neil pointed out this would probably have to be a hostile takeover. There would probably also be a bidding war with Oracle and IBM.

BTW: The open source stuff doesn't really factor in because Sun owns so many software patents around Java, Solaris, etc.

-James

Ross Mason said...

Hey James,
If I'm honest I doubt MS will really have a part to play in SUN's future. But it does highlight SUN's vulnerable position right now and it's more likely that Oracle or IBM would make a bid for it. The other option of course is that SUN go private again, which may not be such a bad thing to get their current strategy to take hold.