Sun / IBM deal to collapse?

The hot news of the hour seems to be that IBM's bid for SUN is off — they couldn't agree on price. This possibility has been discussed at length in the tech press in the last few days, and the consensus is that this is going to be a disaster for SUN: Schwartz has supposedly hawked it around the whole world looking for a buyer, and (supposedly again) no one expressed interest apart from IBM.

The fear is that, now they know that SUN's top managment has effectively admitted it's unable to return the company to profitability, both customers and employees may haemorrhage away. Some have even hinted that this was IBM's game plan all along — which is not an impossibility, since that used to be Microsoft's favourite trick.

There is perhaps, however, one last, desperate hope: Cisco. The investment boards are humming with the idea that SUN is a perfect buy for Cisco: it would give them an 'in' to the server market, which they have so very recently decided to enter. Hmm, Cisco's new boxes are all Intel I think, and while SUN has a substantial Intel business, its main line is of course Sparc. That said, Cisco is nothing if not an adventurous and technically competent company, and if they decided to run with the Sparc heritage, you might end up seeing a version of the chip ending up in their routers :)))

Sparc has long been almost a millstone round SUN's neck. I'm not quite sure why. ARM has made a major success of a non-Intel chip, with an enormous number of licencees busily fabbing away and integrating it into their custom designs, and I know that SUN has been willing to make the IP available to fabricators in what seems to me a similar way (the devil's in the details though) but so far, only Fujitsu has taken it up. Maybe they were myopic about targetting the architecture at the server market: maybe they should have focused more on scaling Sparc down as well as up. They did that a little bit, aiming it at multi-chip webservers, but perhaps they could have gone a bit further than that.

Whatever. It's now looking, with the benefit of hindsight, as though Java has been an enormously costly mistake for SUN. Not that it hasn't been a very successful platform — it has. But because they've never managed to make more than small change from it, while it's sucked up an enormous amount of management (and, in the early days, legal) time and effort that would perhaps have been better spent on SUN's core competencies.

I say that with a good deal of regret, and as a fan of Java. And of course, it didn't look like that in the early days. Java, originally developed for set top boxes, came out at a time when Microsoft ruled the desktop even more than now, when Microsoft had all the mind share, and when it had started to stop making versions of Windows for desktop and server class processors other than Intel's. The worry was that a Microsoft future would be an Intel future, and that Sparc would go the way of MIPS. Java then, with its virtual machine and processor-agnosticity, was a way of keeping Sparc in the game. But somewhere along the line it got too important, and SUN ended up chasing a mirage.

The brave investor then, might wait for SUN to fall below $4, even as far as $3, and then buy in the hope of a Cisco offer. Or even the hope of the board kicking Schwartz out the door, which would be bound to have a salutary effect on the share price, even if only temporarily.