Sun's future up in the air after talks with IBM break down
Struggling vendor could seek another buyer if IBM deal is dead -- or try to survive on its own
Follow @infoworldThe next step for Sun Microsystems, after its apparent failure to reach an agreement with IBM on an acquisition, is to continue looking for a buyer, change its management -- or just keep plugging along and pretend that nothing ever happened.
In terms of a sale, it's entirely possible that Sun could attract bids from Cisco, which is trying to move into the server business, or Fujitsu, which makes servers based on Sun's Sparc technology, or even Hewlett-Packard, as part of its perpetual market-share battle with IBM.
[ Over the weekend Sun's board rejected a formal acquisition offer from IBM. | Check out InfoWorld's special report: IBM in talks to buy Sun. | An IBM purchase of Sun would end up killing some Sun technologies but may help others. ]
Another option is overhauling Sun's management in response to the company's continuing revenue decline and the reported collapse of the talks with IBM. There are even rumors that CEO Jonathan Schwartz could be replaced by chairman and co-founder Scott McNealy, who stepped aside as CEO and was replaced by Schwartz four years ago this month.
But Schwartz was McNealy's protege, and the latter has publicly supported Sun's overall strategy under his successor.
Then there's the pretend-nothing-happened-with-IBM approach. Sun continues to develop new products and is expected to release its 16-core Rock processor later this year -- albeit more than 12 months behind the original shipment schedule.
The company has done well sales-wise with the line of servers based on its UltraSparc T2 processor, which is showing revenue growth, as well as with its x86-based systems. But Sun isn't doing well enough, with revenues dropping nearly 11 percent in the last quarter and layoffs continuing under a restructuring plan announced in November.
The problem is that for now, no one really knows what Sun plans to do next -- and so what's to motivate corporate users to continue buying new hardware from the company?
