Sun has aspirations in the software business, and maybe Veritas might have been a good fit for Sun, but at a cost of $13.5 billion, Sun could not really afford to do the deal. That’s about twice the amount of cash Sun has in the bank and almost the same market capitalization that Sun has.
The Symantec-Veritas deal left Sun’s president, Jonathan Schwartz, in a strange position, because many people realize that Veritas is a better fit for Sun than it is for Symantec, and that is probably why he posted a note on Sun’s Web site explaining that he was thrilled with the deal. It’s great news for Sun, he said. It validates what we have been saying for years: that the world is moving to a utility compute world with greater simplicity, fewer vendors, and a more reliable infrastructure.
This is debatable. In fact, if anything, it demonstrates once again that software vendors are less interested in innovating than they are in locking in customer sets and maintenance streams, because they think largesse, not someone else’s innovation, can save them from being knocked out of business. (To a certain extent, this is correct, but, thankfully, every now and then some real innovation happens, and it really knocks the software industry into a wall.)
While talking about the Symantec-Veritas deal, Schwartz also took the opportunity to address the suggestion by some that Sun should give up on Solaris and buy a commercial Linux distributor, such as Red Hat Inc or Novell. Sun can, in fact, afford to buy either company – or both – since they are only valued at around $2.3 billion each at current stock valuations.
We never comment on rumor and speculation, explained Schwartz, before shifting the topic slightly. We understand customers are increasingly concerned about the lock-in of Red Hat’s proprietary Linux, but rather than acquire the company, we plan on acquiring their customers one by one – with native Linux execution in Solaris 10.
