For McNealy And Sun, What Goes Around...


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Scott McNealy has always been one of the wittier and more colorful people in high-tech, but that wit is now being turned against him.

Merrill Lynch analysts have put out a report looking at Sun's decision to buy StorageTek, and they don't mince words:

Sun used $3.1 billion of its $7.5 billion in cash for a deal that doesn't seem to accelerate revenue growth, given that tape is a mature market. If Sun management called the HP/Compaq merger the collision of two garbage trucks, what is a Sun/StorageTek combination?

Criticism wasn't only coming from Wall Street, either.

Inside Sun, though, the deal seems to be viewed a little more favorably. Sun employee Jose Femia blogged the following:

The combination will create a new global leader in comprehensive network computing and data management, which collectively had total annual revenue of more than $13 billion in the past four quarters.

Time will tell whether this is just the creation of another garbage truck or a monster truck.

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