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Michael Dell says uncertainty about Sun-based servers could push some towards x86-based servers

The poor global economy has sent many technology firms scurrying to try to shore up operations and ensure profitability. For many companies large and small, mergers may be the way to prevent them from going under.

According to a report from The Wall Street Journal, IBM is in talks to acquire Sun Microsystems in a deal reported to be worth a total of $8 billion. The WSJ reports that the deal would have IBM paying at least $6.5 billion in cash and the deal would include $1.4 billion in cash on Sun's balance sheet.

The possibility of a Sun buyout has Michael Dell, CEO of Dell computers excited at the opportunities the proposed deal will create. At a Briefing in Tokyo, Reuters reports that Dell said, "Just the rumor of IBM potentially purchasing Sun creates an enormous opportunity because all of the Sun accounts are very concerned what will happen to the Solaris platform and Sparc microprocessor."

Dell believes that the rumor of a sale will be enough to push many enterprise customers using Sun processors and operating systems into migrating to x86-based servers. One of the best product segments for Dell is x86 servers, so the potential for new business for the computer maker is high.

Dell has a fight building in the server market with Cisco Systems announcing that it would be getting into the server market and HP now offering a more complete services package thanks to its purchase of EDS.

Dell is currently behind both IBM and HP in the server market reports with a market share of around 12%. If users of Sun-based server systems begin migrating to x86-based machines, it could give Dell the boost it needs to close the gap on the leading server companies.

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WTF?
By diego10arg on 3/24/2009 11:44:53 AM , Rating: 2
quote:
Dell is currently behind both IBM and HP in the server market reports with a market share of around 12%. If users of Sun-based server systems begin migrating to x86-based machines, it could give Dell the boost it needs to close the gap on the leading server companies.


If IBM gets SUN, why SUN Customers would actually get an x86 from DELL instead of IBM?

Weird!




RE: WTF?
By gyranthir on 3/24/2009 11:54:07 AM , Rating: 2
Cost is my 1st thought.

Second thought would be the potential elimination of an IBM competitor by IBM acquiring Sun and then eliminating the Sparc/Sun product line.

Thus, pushing more customers to Dell and HP.


RE: WTF?
By Master Kenobi (blog) on 3/24/2009 1:11:59 PM , Rating: 2
Given that SPARC directly competes with the IBM POWER processors (and to a lesser extent Intel Itanium) I see no good reason to leave it around. It would be more beneficial to IBM to simply push everyone to migrate from SPARC to POWER.

*Caps utilized for those that don't understand they are processor architectures.


RE: WTF?
By Ammohunt on 3/24/2009 1:54:17 PM , Rating: 2
It does? maybe on price.


RE: WTF?
By TA152H on 3/24/2009 7:37:12 PM , Rating: 2
I don't know where you came up with this, since the Niagara is a very odd processors that is fundamentally very different from POWER. Well, it's fundamentally different from most of them, so I don't know how you could say it competes directly with any of them.

Certainly, it handles it's kind of applications better than any of them, in terms of performance per watt, and cost. Not that this is the instruction set, just the architecture of the processors. They could certainly do it with POWER, but they haven't really.

By the way, does anyone else get annoyed with the phrase "instruction set architecture". The architecture certainly is related to the instruction set, since it has to execute the instructions, but they aren't the same thing. Look at the AMD line and Intel lines. Same instruction sets, way different architectures. I wish people would use architecture more correctly. Or how about x64? Did everyone forget why we called x86 processors, x86? Did we call the 386, x32? I hate it.


RE: WTF?
By Brandon Hill (blog) on 3/24/2009 11:53:43 AM , Rating: 3
Who says that Sun customers have to stick with IBM "if" the deal goes through. If Dell offers them a sweeter deal, then so be it...


RE: WTF?
By Shadowself on 3/24/2009 12:04:01 PM , Rating: 5
From the few Sun server customers I know, none of them are about a "sweeter deal". They are about hardware capabilities and service.

IBM buying Sun will give them a migration path to either x-86 servers or POWER servers so the hardware is covered.

IBM's strong suit has been service for a decade or more. I'm certain IBM will offer a very detailed migration path (with lots of hand holding) for Sun users. Will Dell offer such an incremental migration path? Or, does Dell think shops with dozens of Sun servers will switch all of them at once?

I don't see a big opening for Dell. Sure, if there's a change a few Sun customers will open things up to full competition, but I believe these will be a small percentage.


RE: WTF?
By cnar77 on 3/24/2009 6:13:45 PM , Rating: 2
You've posted the most logical response I've read so far. No company that buys or bought a solaris/SPARC box is over concerned about the cost advantage of x86.

This also mirrors what Scott McNealy said, that he would like to see IBM port its OS etc to SPARC. Purhcasing SUN allows IBM to port their OS and applications designed to run only on POWER to SPARC providing a more than adequate and well supported channel for current SPARC/Solaris users.

Even though money is always important I think too many people are focussed on money. Always remember that a business must first perform acceptably and reliably to make a profit. Before Linux kernel 2.6 there was no Interest for financial firms etc to use x86 or X86-64 systems. If you were going 64bit you went with what worked not what might work.

This has the potential to make IBM a huge threat to the x86 server market for Dell. It's a good CEO who can see the positives in a difficult situation and try to exploit them, but even that cannot eliminate the fact that this would place IBM into more data centers interms of software, hardware and services. Dell is in trouble. The others have Operating Systems etc they can use to exploit their 64 bit systems. Dell relies on 3rd parties such as Microsoft and RedHat. On the CPU side Dell has to rely on Intel and AMD. This plays into IBM and HPs hands especially as some customers will see an opportunity to migrate platforms assuming there exists a legtimate business case or if IBM/Sun service sucks during the acquisition phase.


RE: WTF?
By atlmann10 on 3/25/2009 12:52:38 AM , Rating: 2
Great post, and I believe absolutely correct. Everyone must also realize that with IBM taking over SUN SPARC processors and Solaris will also be owned by IBM. This gives them a direct stand in the op sys market especially being that they already have one there just doubling it. The same goes for the processor market they can incorporate Suns cpu's with there own POWER line. This will make IBM twice as strong and bring customers with them almost automatically at least to a great percentage.


RE: WTF?
By TA152H on 3/24/2009 7:29:30 PM , Rating: 2
I don't agree with you at all.

First of all, my experience is kind of old, so I'm not sure if it's still how things are done, but never think of Dell as just Dell. Dell doesn't go in there alone, they have Intel with them. I actually ported some applications from Solaris to Solaris x86, and Windows NT/2000, so this is something I have a lot of experience with.

It's really not very hard to port the applications; in fact it's a lot easier to do than I thought it would be. It's not trivial, but by the same token, it's so daunting either. Besides, most of these places already have x86 servers and certainly workstations, so they have the expertise.

As I mentioned, Intel comes in big and strong with Dell if it's a big center, and they have everything IBM does. They have compilers, and all sorts of performance tools, and they come into meetings, and get you in contact with people that can help you with this or that. You're not stuck with a cardboard box maker like Dell; we probably had more meetings with Intel than Dell. Not too surprisingly, Dell was more the salesman, and Intel was more the project team that really helped you. And they are very, very formidable.

So, I don't see why Sun customers would feel inclined to go with IBM much more than anyone else. Most will be much more intelligent about going with a failed company like IBM, who abandons technology a lot more quickly than Intel does. Anyone remember OS/2? IBM doesn't even make PCs anymore. POWER's failure can be summed up in one word "Apple". When another competing instruction set goes away, don't you think that's going to be a lesson for customers to be wary of another non x86 platform? We all know IBM will abandon technology, they've done it before, and POWER is expensive to keep making, and certainly IBM is not as stable as Intel (amazing to say that).

I think this is an opportunity for all of them to pick the bones of Sun. IBM will surely get some, and so will Dell and HP. I'd be willing to bet that POWER doesn't get the lion's share of it either. If I just got scalded by a non-x86 instruction set, I'd be much less inclined to go with another one.

Show me someone who'd bet on IBM, a mainly service company, against Intel, mainly a hardware company, and I'll show you a consumer, not a manager in a big company. Or not one for long.

IBM x86 servers, yes, but POWER? I don't think most will go there. Of course, this assumes IBM doesn't continue making SPARCs. It's likely, but not certain.

Also, what if IBM isn't really talking to Sun, or they don't buy them out? Another great opportunity for the others, since SPARC suddenly becomes marginalized and uncertain. I wouldn't invest in it now, would you? I would consider Dell, along with HP and IBM though. Anything with x86.


RE: WTF?
By Lifted on 3/24/2009 12:13:46 PM , Rating: 2
What a weird article. It reads like a Dell press release.

With IBM and HP being the big boys in the x86 server market, why would people who are used to paying a premium for the best solution for their needs (Sun servers) all of a sudden choose Dell over HP or IBM to save a few dollars. I think this Dell press release is really reaching. They are assuming

1: IBM would, for some reason only Dell knows here, stall or cease development of Sparc, Sun's bread and butter.

and

2: If 1 ever happens, customers would get nervous (uhhh, sure) and jump to Dell over HP or IBM.

Overall a pretty pathetic attempt to boost confidence in Dell's server division.


RE: WTF?
By KentState on 3/24/2009 12:31:27 PM , Rating: 2
It's also worth mentioning that customers that are using Sun servers probably already have x86 servers in their shop. That means, a good percentage of Sun customers already have a business relationship with IBM and HP compared to Dell. If they migrate off of the Sun, they will go with what they already have experience with.


RE: WTF?
By karielash on 3/24/2009 12:26:54 PM , Rating: 2

It's not all about money. Our sun systems generally perform better (and more reliably) than our equivalent Dell systems. Personally I think the whole thing will be great for Sun, Sun is a superb technology company with poor business sense, hopefully IBM can inject a little of that into Sun while maintaining the technology side.


RE: WTF?
By Sunner on 3/24/2009 2:46:56 PM , Rating: 2
A customer running the venerable SPARC/Solaris combo is unlikely to want to switch all of a sudden, and even if they do, they're likely to turn to a company that can offer services to help with the transition, which makes IBM a prime candidate since they will have Sun's SPARC/Solaris competence as well as their own x86/Linux(or possibly AIX/POWER if they manage to sell that) competence.
Dell on the other hand doesn't have much at all in the way of services compared to HP/IBM, especially not when it comes to "exotic" architectures and OS's.

Still, migrating not only from Solaris to Linux/AIX, but also from SPARC to x86/POWER, that's a costly proposition in every way, IBM is more likely to keep SPARC alive the same way HP has kept Alpha and PA-RISC alive, probably by just aiding Fujitsu in the design department, and gradually trying to ease customers onto their own hardware and software over a long time span.


RE: WTF?
By shaw on 3/24/2009 2:55:21 PM , Rating: 3
What Dell is basically saying is, people will get more Dell servers because IBM is costly and a pain in the ass to deal with in any case.


Bad argument Dell....
By Fallen Kell on 3/24/2009 4:39:47 PM , Rating: 2
If customers of Sun want x86 hardware, they don't have to look any farther than Sun already for that hardware. The whole point that these people are buying from Sun is because of the service relationship they get from Sun. Having IBM purchase Sun does not affect that service relationship at all. In fact all it does is bolster their feeling about purchasing equipment from Sun because they are going to be in a stronger position than previously.

SPARC isn't the only thing that Sun is making, and it is not necessarily the reason people are buying Sun gear. We buy Sun gear because it is dependable, well engineered product which has (in our quantitative results), less downtime due to hardware failures, and better remote management capabilities with Sun's ILOM/ALOM service processors, and typically longer overall equipment survival before catastrophic failure. Show me a Dell that has run non-stop for 10 years straight without needing to be powered down or services otherwise shutoff during that period of time. We several examples of Sun gear that has been able to do that.




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