There is a lot of discussion about the possible acquisition of SUN by IBM. Whether it happens or not presents the issue again of how to manage legacy equipment in your data center. Critical components in your data center might be unsupported after an acquisition because they are not profitable or compete with other components owned by the acquirer. Hardware companies and software companies go out of business all the time, and customers are left looking for third party support to get them over the transition.
Most companies have some sort of formal or informal D/R plan, but very rarely have I seen a plan where a company deliberately has competing vendors in their data center in case of the acquisition or collapse of one of their vendors. One of our customers in the Southeast, keeps us in their data center in case NetApp gets acquired or for whatever reason terminates support for their legacy equipment. This strategy also works to lower the cost of maintenance and support because two companies are competing for the business, forcing sales folks to sharpen pencils.
NetApp and SUN have seemed to compete and cooperated for many years since they co exist in many data centers. The lawsuits between them seem to have strengthened the the wing in each organization that wants to compete instead of cooperate. If IBM purchases SUN the competition wing of SUN might not want to continue the OEM relationship that IBM has for NetApp’s filers.
I am certain that the lawyers are having some interesting discussions about this and other subjects related to cooperating with the competition.
WSJ on Saturday
Teams of International Business Machines Corp. lawyers are examining Sun Microsystems Inc.’s contracts and documents in a due-diligence process that could take a number of days, according to people familiar with takeover negotiations between the two companies.
These people said it isn’t clear how many days will be needed for the lawyers to finish their work.
Barron’s on Saturday
SATURDAY, MARCH 21, 2009
PLUGGED IN
IBM Deal May Hurt NetApp
By MARK VEVERKA | MORE ARTICLES BY AUTHOR
NetApp’s dimmer outlook.
IBM’S ACQUISITION OF Sun Microsystems might make sense if Big Blue could snap up Sun on the cheap. Then IBM could justify a potential deal as an inexpensive way to acquire Sun’s customer base, provided it succeeds in drastically slashing costs at the Silicon Valley computer maker. From a hardware perspective, however, there are many questions regarding overlap and fit (see Follow-Up).
The biggest loser in an IBM (ticker: IBM) takeover of Sun (JAVA) could be NetApp (NTAP), a maker of networked storage systems, as the pool of potential buyers for the company would shrink.
