Dropping profits and stock prices have analysts speculating that Sun could be a target for either acquisition or a restructuring in which the company would sell off parts of the business and focus on a smaller set of technologies.
"In 12 months, Sun will not be the same company it is now," predicts Enterprise Strategy Group (ESG) analyst Brian Babineau.
Sun's main products include Sparc processors and servers, the Solaris operating system and Java software.
While the entire company being purchased is a possibility, another option is a carve-out plan allowing Sun to offload some areas of the company and focus on those that remain innovative, Babineau says.
Sun's operating system business and StorageTek line are still doing well, Babineau says. The company is really struggling in servers and server virtualization, however, he says. (Compare server products.)
Sun's server revenue and market share both dropped this year, according to a July report by Gartner. For all Sun businesses, net income for the fiscal year that ended June 30 was US$403 million, a full $70 million less than the previous year.
Sun's stock, which was trading at a high of US$24.92 last October, was selling for just under $10 this week.
"They're squeaking out quarters, they're trying to cut costs," Babineau says. "It just doesn't seem like there's any long-term strategy over there that will generate revenue growth."
In a July 31 report, the 451 Group analyst firm raised the possibility of Sun being acquired. "Sun's sunken stock price creates a relative bargain considering its roughly $4 billion cash on hand, sizeable intellectual property and patent portfolio, and of course, its respected technology and products," 451 Group analyst Jay Lyman wrote. "These assets could make it easier for an acquirer to roll the dice or to sell the idea to their shareholders."
Fujitsu and HP would be leading candidates if Sun is for sale, Lyman wrote. Fujitsu "is already aligned with Sun, given its role in manufacturing Sparc processors and hardware," he wrote. A Sun buy "could also give Fujitsu, or any other potential acquirer, an instant open source product line."
HP could see a Sun acquisition as a way to get deeper into open source software, Lyman wrote. Even though HP hasn't contributed a lot of code or resources to open source, it has benefited by certifying its hardware for Linux.
Latest on Open Source
- WordPress guns for Web content management duties
- Rackspace hires to align with MySQL offshoot
- IBM brings memory flexibility to x86 servers
- Group seeks to open source data-center design
- Report: North Korea develops own Linux distribution
- Open-source hardware takes steps toward gadget mainstream
- UK registry to implement DNS security protocol
- Linux 2.6.33 released: nVidia driver in, Android out
- Web app developers showered with advice
- FSF to Google: Free the On2 video codec
Open Source Essentials
- Microsoft 'interested' in open source browser: Ballmer
- Flying high with open source
- Open sourcing code may improve transparency on Wall Street
- Problem-solvers hunt open-source solutions
- Open source advocates hail appeals court ruling
- Open-source software a security risk, study claims
- Insurance company bets health on open source
- Open source stack solid foundation for All Homes
- 20 great Windows open source projects you should get to know
- Via releases laptop design as open source
- Java Web Portal Developer - Front End15/03/2010
Other
I.T. & T
Are you an experieced Java web applications developer with experience in Spring and Web content management systems? - Senior Business Analysts - PCI industry experience15/03/2010
Other
I.T. & T
Excellent opportunity for Senior BA's to work on a new project. 6 Years BA experience - 4 x Business Analyst - IT15/03/2010
Information Technology and Internet
I.T. & T
Experienced IT BA - in various areas, have you worked on large projects? Looking for a stable company and career progression? Apply Now!! - Program Manager15/03/2010
Other
I.T. & T
Heavy hitting Program Manager required for an upcoming need. Good $$$ for the right candidate. Utilities experience advantageous. - Siebel Administrator/Configurator15/03/2010
Other
I.T. & T
Strong Siebel background. Oracle E-business suite expeirence a bonus. Great company name! - Customer Service/Sales Support - IT15/03/2010
Other
I.T. & T
Do you have a passion for IT? Do you take pleasure in advising clients in their product selection? Are you seeking an employer which recognises talent - Information Management Team Lead Oil & Gas15/03/2010
Other
I.T. & T
International Co - Oil & Gas - Great Salary for right candidate. This is not a Records Management role - much more technical and hands on..
Whitepapers
-
Video Overview | Successful Migration to Windows 7 -
Neverfail Solutions for "SQL Server® Always On" -
Legacy Tools: Not Built for Today’s Helpdesk -
How NOT to Wreck Your Windows 7 Migration | Guidelines for Planning and Executing a Successful Windows 7 Migration -
File Integrity Monitoring: Compliance and Security for Virtual and Physical Environments
TechWorld Blogs
Recent blog posts
- Following social networking privacy
- All aboard the Avatar Economy
- Facebook, PayPal tie up ad payments
- Google goes for more markets: too much too quickly?
- Talk about mobile computing
- iPad arrives: can Apple crack the tablet?
- Linux.conf.au 2010 kicks off in New Zealand
- VMware jumps further into SaaS with Zimbra
- Amarok 2.2.2 released – rock on!
- Happy Nexus Year
Recent comments
- Nice informaion
24 min 16 sec ago - Great Indian Developer Awards 2010
7 hours 20 min ago - govt a bunch of wowsers
11 hours 1 min ago - Best way to block these idiotic initatives
1 day 2 hours ago - not for us
3 days 1 hour ago - Any related jobs
3 days 17 hours ago - epic phail
4 days 11 hours ago - We should all be familiar by
4 days 20 hours ago - eFront Rocks!!!
5 days 6 hours ago - I have an eris, and I have
5 days 17 hours ago - I think free offerings are
5 days 23 hours ago - John Lindsay
6 days 12 hours ago - e Front looks best as far as
1 week 5 hours ago - How are they thinking to face to brazilian corruption on telecom
1 week 1 day ago - want free call
1 week 2 days ago - Very Useful information ,
1 week 2 days ago - A challenge to Google?
1 week 3 days ago - Oh come on...
1 week 3 days ago - It doesn't mater what you think
1 week 4 days ago - hi aman i m pankaj, i have
1 week 4 days ago





Comments
Post new comment