Sun Finally Throwing in the Towel?

Image by JulianBleecker via Flickr

In a post last month about cloud computing I said "For the traditional box sellers - Sun, NetApp, HP, Dell etc - its bad news. No longer will Sun make billions in revenues from companies each building out their infrastructure, as they did in the dot-com bubble."

Tonight comes news that IBM is in talks to buy Sun and that Sun has been actively shopping itself to potential acquirers. While its a shame that a company that was once one of the hottest in the business can't make it on its own any more, its not a surprise given the trends in the market andtheir failed strategies of the past. Example: Cobalt, acquired for $2bn in 2000 and the business discontinued by Sun in 2003. Now Sun's entire market capitalization is just $3.7Bn, for a company with $13Bn in annual revenues and $2.6Bn in cash on its balance sheet. Take out gun, shoot both feet off and, for good measure, do it again.

Not much better news for HP, mentioned in my quote above. In the last week Cisco announced its own range of blade servers, marking a direct frontal assault on their former close partner, HP. I know who I'm betting on and its not HP.

The hardware business in Silicon Valley will see radical changes over the next few years .... but the valley will continue to evolve and grow in other directions as it did with creating Google, Yahoo and Ebay and those new giants we have yet to see emerge. The talent, the money, the environment, the ideas - its still here!