After weeks of private negotiations, IBM was poised to buy rival Sun Microsystems for a reported $7 billion. Negotiations apparently broke down on Sunday when Sun’s board rejected a reduced offer. But beyond allowing IBM to reclaim from Hewlett-Packard the title of world’s biggest computer company, why would the company even want Sun, a sprawling Unix vendor that has struggled for years to even show a profit? The answer, according to insiders at both companies, lies in Sun’s intellectual property.
Not only would Sun be IBM’s largest acquisition ever, but the buy is out of character for the staid mainframe company, which has for several years worked to streamline itself and become a very profitable vendor of computer and Internet services. But sometimes a deal comes along that’s simply too good to pass up. Despite years of losses, Sun has continued to spend an average of $3 billion per year on research and development. Sun also has a huge patent portfolio that might have unique value to IBM, the world’s largest and arguably most aggressive licensers of technical IP, according to experts in IP licensing.
The parts of Sun that have most value to IBM are the Java programming language, Solaris (Sun’s version of the Unix operating system), the MySQL open-source database, and certain virtualization and cloud-computing components.
IBM has already made a huge commitment to Java, a language that it doesn’t control. Now almost 15 years old, Java has come into its own as a platform for mobile computing and server applications. “As a high-level language, Java is ideal for applications that are intended to run for weeks and months at a time without having to restart,” says Paul Tyma, former senior developer of server software at Google and now chief technical officer at Home-Account, an Internet startup in San Francisco. “Compared to older languages like C++, Java is ideal for large enterprise applications,” he adds. “The longer it runs, the better it runs.”
Java is also the dominant development environment for applications running on more than one billion mobile phones–an area of computing that is not only growing like crazy, but, with mobile devices being replaced every 18 months, evolving like crazy. Now IBM will have a crucial piece of that new business.