SHARE
Facebook X Pinterest WhatsApp

IBM CEO (Almost) Says Why IBM Targeted Sun Microsystems Acquisition

IBM (NYSE:IBM) has upped its software and services game to become 80 percent of its business, a big increase from the 50-something percent that software and services used to contribute. But as IBM recounted its strategic moves towards emphasizing software and services putting less of a focus on hardware sales during its IBM Analysts Day […]

Written By
thumbnail
Jessica Davis
Jessica Davis
May 13, 2009
Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More

IBM (NYSE:IBM) has upped its software and services game to become 80
percent of its business, a big increase from the 50-something percent
that software and services used to contribute.

But as IBM recounted its strategic moves towards emphasizing software
and services putting less of a focus on hardware sales during its IBM
Analysts Day today, the company almost begged the question "Why did you
even consider acquiring Sun Microsystems (NASDAQ:JAVA) then?"

It’s a question that plenty of people asked in March as Sun and IBM were widely reported to be in talks about an acquisition.

Bernstein Research Senior Analyst Toni Sacconaghi asked just that
question at the end of the morning’s presentations at the IBM Analysts
Day.

While declining to name Sun, IBM’s CEO Sam Palmisano says he could
characterize the thought processes behind IBM’s decisions to pursue
certain acquisitions.

Palmisano says that IBM targets acquisitions for one of two reasons:
either the deal is a good strategic fit for IBM in terms of furthering
IBM’s strategic plans, or else the deal is an opportunistic acquisition
that presents opportunity for consolidation and margin expansion.

Reading between the lines, the proposed Sun acquisition would certainly
be the latter. IBM viewed Sun as an opportunity for consolidation and
margin expansion.

Sun yesterday filed its own version of its process to sell itself to
another company in a filing with the Security and Exchange Commission
(SEC). In the document, Sun indicates that Oracle (NASDAQ:ORCL), which
eventually entered into a deal to buy Sun, was initially only interested in Sun’s software business, and not its hardware business.

 

Recommended for you...

Mission Announces New Multi-Product Solutions in AWS Marketplace
Jordan Smith
Dec 10, 2025
CrewAI CEO: Human Trust is Core to Autonomous AI Agents
Jordan Smith
Dec 9, 2025
Sparklight Launches Partner Solutions Program
Jordan Smith
Dec 8, 2025
ISC2 Report Shows AI Excitement, Risk Worry, and Burnout
Channel Insider Logo

Channel Insider combines news and technology recommendations to keep channel partners, value-added resellers, IT solution providers, MSPs, and SaaS providers informed on the changing IT landscape. These resources provide product comparisons, in-depth analysis of vendors, and interviews with subject matter experts to provide vendors with critical information for their operations.

Property of TechnologyAdvice. © 2025 TechnologyAdvice. All Rights Reserved

Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.