The New York Times is reporting that I.B.M. Reportedly Will Buy Rival Sun for $7 Billion.
If true, this is stunning news.
First, the article reports that the price represents a 100 per cent premium based on Sun’s price before the acquisition rumors first came out last month.
Let’s do the math. A 100 per cent premium is $3.5B. Now I estimate conservatively that IBM letting go of one in ten IBM Research employees, most of whom have Ph.D.’s, is saving IBM $100B per year.
Do you think anyone else in the world thinks Sun is that much more valuable than IBM’s Research Division. I expect Sun does have a research division, but I couldn’t name anyone in it apart from Jim Gosling.
However, this is absolutely fabulous news for Linux.
On the day that IBM acquires Sun, Linus is going to send a letter to IBM, saying “When will IBM relicense Solaris under GPL?”
IBM will then face two choices. IBM can continue to keep Solaris under a license incompatible with the GPL, which will ruin IBM’s reputation in the Linux world, just totally ruin it.
So IBM will have to relicense Solaris under GPL, and within months almost every line of Solaris source code of any value will be sucked into Linux. Solaris will collapse. This will force the migration of Sun’s existing Solaris-based hardware users to Linux, making IBM even less competitive, since xSeries margins are razor-thin.
This will also be good news for Java. IBM will probably — or certainly should — relicense the Java test suite, also known as the Java Compatibility Kit, under an open-source license. Sun’s keeping this test suite proprietary has held back the advancement of open-source versions of the Java suite for years.
This will also make it easier for Microsoft to compete against Java, in particular by offering “non-standard” extensions to it. Sun has been able to maintain control over the brand/trademark, but once IBM becomes the owner it will be harder to do so, and an aggressive stance here would do IBM even more damage.
It’s also good news for Open Office. IBM will have to take over its development, since Sun has for years not had the resources to invest in the project in any meaningful way.
It will also mean the demise of Lotus Symphony, unless the full code for it is released under an open-source license. IBM cannot continue to provide a closed alternative to an open project once it becomes the owner of the open project.
So the gain is not just to Linux, but to many other open-source projects. IBM is spending billions of dollars to buy code that is currently not open that IBM will have to open to maintain its credibility.
No large company has a better reputation in open-source than IBM. No company has a worse one than Sun.
IBM will need to favor the more open approach in each situation involving an existing Sun project that is open-source in part or whole, for to do otherwise will damage IBM’s reputation.
It will mark a great triumph for current Sun CEO Jonathan Schwartz. He has doubled the value of his company in a month of negotiations, making IBM pay more and more for assets it will soon have to give away. He is the only clear winner here.
By the way, those Sun employees should stay in California if at all possible.
I was at the New York State Dept. of Labor office in White Plains yesterday. I had to fill out a large form. I sat down at a table, next to a woman filling out the same form. When I mentioned I had been laid off by IBM, she said she had too, and that she had over 36 years. We talked for a bit, and within two minutes two other laid-off IBMers were at the table.
I now make a point of telling people that IBM laid me off. There’s no reason to hide it, and I might learn something or make a new connection.
Until the last week of so, when I — with a B.S. in Mathematics from Caltech and a Ph.D. in Computer Science from the Courant Institute — told people that I had been laid off, they for the most part just clucked and said the times were tough.
For the last week, if you even mention the word “IBM” in the lower Hudson Valley, the response is visceral and vitriolic.
When I joined IBM in 1987 I learned that a quarter of IBM’s assets and a quarter of its assets were between New York City and Albany. Today people just *hate* IBM around here. The damage to IBM’s brand far exceeds any possible savings in salary. It will be a generation, at the least, before IBM enjoys a good reputation in this area.