SUN-IBM Talks Breakdown

As reported in multiple sources today, including Reuters, Sun has apparently rejected a purchase offer by IBM.

“Shares of Sun Microsystems Inc tumbled 22.5 percent after it rejected a $7 billion buyout bid from IBM, leaving the smaller server and software maker vulnerable to lawsuits from shareholders nervous about its viability as a stand-alone company.”

Part of the precipitous drop in share price was the realization that IBM-SUN threat to Microsoft dominance may no longer be a possibility.

(from Digital Journal)

“But the Sun cloud computing announcement also coincides with IBM’s virtual desktop strategy that they brought to market late in 2008, bundling Lotus and other services to effectively strike at Microsoft. The IBM strategy, as reported in eWeek, would not only threaten Microsoft’s desktop software, but delivers what many in the hardware manufacturing space have feared – cloud computing for the corporate enterprise IT market.”

Since Sun probably needs an acquisition more than IBM, this was quite an interesting move.