Reported Acquisition Of Sun By IBM Rattles Channel Partners
Mark Reed, president of Enterprise Consulting Group, worries that the acquisition -- real or not -- will cause customers to hesitate before buying the Sun products that account for 25 percent of the St. Louis-based solution provider's revenue. "A customer could say, 'Do I want to do business with Sun, or wait six months and do it with IBM,'" he said, adding that the reported buyout talks send "a message of uncertainty."
Reed said he received three e-mails from Sun customers today with question marks in the subject line asking about the acquisition rumors.
The idea that IBM wants to acquire Sun doesn't come as a surprise to Gerry Hansen, chief operating officer at N'compass Solutions, a Minneapolis, Minn. solution provider that resells Sun servers (both Sparc- and x86-based), storage systems and software. Hansen said IBM hasn't been as innovative as Sun in recent years in developing server and storage products and he sees a Sun acquisition as a bid by IBM to regain momentum in those markets.
Hansen said it's too early to say just how N'compass would be impacted if IBM buys Sun. But he wasn't overly concerned about the future of Sun's products even if an acquisition goes through. "Sun has a lot of intellectual property and innovative technology that's in high demand and isn't going away any time soon," he said.
Data centers are consolidating, thanks to such technologies as virtualization and products like Cisco's Unified Computing System unveiled this week, according to Yankee Group analyst Zeus Kerravala. And that's leading to consolidation among vendors of data center technologies.
"It's inevitable that someone would buy Sun. It's indicative of IBM, HP and Cisco fighting for the data center," said Michael Haley, president of Edge Solutions in Alpharetta, Ga., an HP reseller. "HP has made huge headway in servers and IBM is losing to them."
An IBM acquisition of Sun could ultimately work to HP's benefit, he said, and presumably its channel partners. Deals this size inevitably introduce a certain amount of disruption that can send customers to safer harbors. "You don't swallow Sun overnight and retain people and products," Haley said. That would be particularly true given the two vendors' very different cultures that he described as "West Coast with flip flops and East Coast with suits and ties."
"This is really a milestone in the battle for control of the data center," said Alani Kuye, principal with Phantom Data Systems, a Norwalk, Conn.-based solution provider. Phantom was a Sun channel partner until a few years ago before switching to IBM to resell its AS/400 servers and Lotus software. He added that Sun's services business could give IBM a boost in the same way HP benefited from its acquisition of EDS.
Andy Kotarba, president and CEO of Dewpoint, a Lansing, Mich.-based Sun-only channel partner, said he would like more details of the proposed deal.
Dewpoint has always tried to build its brand on the Dewpoint name, not the Sun name, because it has multiple dimensions to its business, including consulting and services, Kotarba said.
"I don't want to be known exclusively as a Sun company," he said. "And I don't mean that in a bad way. Such an acquisition might even be good for us. In any case, we'll continue to concentrate on our consulting and services."
Jennifer Bosavage contributed to this story