Where Next for Sun Microsystems?
Sun Microsystems share price has plummeted this week following the breakdown of IBM’s takeover talks. The board rejected an offer of $9.40 per share and terminated their agreement to negotiate exclusively with IBM.
Sun has been looking for a buyer for several months. The company has struggled for a few years and is in the process of cutting 6,000 jobs. Most analysts agree that it has never fully capitalized on its core technologies such as Java. During the mid-1990s, Java was touted as being the only development platform needed for desktop and web applications, but performance issues, licensing confusion, and the success of competing technologies contributed to its sedate uptake in the market.
IBM certainly appeared to be an ideal candidate and it would have been their biggest buyout to date. Their bid seemed attractive: Sun were trading at half the offer price before the talks began. It is still not clear why it was rejected, although more news is expected soon.
For the moment, Sun’s long-term future appears to be uncertain and that could be a concern to web developers. The company is a strong advocate of open source software and currently supports projects such as OpenOffice.org, the MySQL database, and VirtualBox. Although these applications can survive, will they continue to evolve without Sun’s investment?