Blade Watch

Eweek

Despite reports that IBM has taken its $7 billion offer off the table, Sun’s best option is to broker a deal to be bought by IBM, analysts say. There are not a lot of possible suitors out there for a server vendor that is struggling in an already struggling market, and remaining an independent company isn’t a good option for Sun, they said. IBM offers Sun the best chance at a good selling price, and is the best option among HP and Oracle. Though Cisco has been mentioned as a possible buyer, analysts say such a deal wouldn’t make sense for Cisco.

In the end, the move that makes the most sense for Sun Microsystems would be to be acquired by IBM.

That’s according to analysts who have been watching the rollercoaster negotiations in IBM’s attempts to buy Sun for somewhere in the neighborhood of $7 billion. IBM reportedly pulled its offer from the table April 4 after concerns from Sun executives over price.

It essentially comes down to the fact that Sun is losing a lot of money—about $209 million in the fourth quarter 2008, with more expected in the first quarter 2009—and is losing ground in a server market that itself is contracting, thanks to the global recession.

Another article about the Sun/IBM transaction, it will be interesting to see how things develop, and it’s great to get another opinion on it, we’ll have to see.

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