Executing on positioning, establishing your unique identity is never easy however a well timed acquisition can hit the spot. Here are seven reasons why IBM might buy Sun:
Timing; Market value of Sun at the peak was $205 billion, purchase price today, around $8 billion.
Customer dollars; IBM gains higher market share in key sectors, government, telecoms, financial services.
New trends; IBM covers Cisco’s move into the server market and builds it’s own capacity to remain a dominant player in the fast emerging Cloud Computing Market (renting of software over the web in a SaaS model)
Services boost; IBM have the potential to do a Red Hat/Linux business model by applying IBM’s global service team to add value to Sun’s free software platforms.
Middleware Sales; Boosted by cross-selling to the new hardware customers it acquires.
Hardware business; Overnight it improves the economies of scale of its own struggling hardware business.
Competitive edge; Deal helps in the battle against Microsoft and Oracle in their relevant competitive segments.
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About the Author
Smith has been creating remarkable businesses since the early 80s with Thomson (now Thomson Reuters), creating Livingstone Guarantee an early leading investment banking boutique as the second employee, building the FTSE 100 Capita Group in the 90s and more recently turning around software businesses in Boston over the last decade. He formed The Portfolio Partnership in 2010 to help CEOs fulfill the potential of their businesses. Ian’s book, Fulfilling the Potential of Your Business, recently won the Small Biz Book Awards for Management. Still competitive, Ian is ranked #1 in the US at 400m on the track for his age.