Submitted by Che Kristo03.11.2009
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This prediction is closed and has been judged.
Cisco wants to get into the server business. The tech bellweather is targeting the virtualization market, a segment that Gartner predicts will grow 43% to $2.7 billion worldwide this year. Cisco will be competing with heavyweights like IBM and Hewlett-Packard, which sell servers with VMWare's virtualization software. Others include Microsoft and Dell.
Cisco, flush with cash, could get a strong foothold in the crowded server market by snapping up Sun Microsystems. Sun has an excellent portfolio of products but consistently finds itself as a takeover target. In this downturn, Cisco CEO John Chambers (pictured) could go on a spending spree and buy Sun at a discount.
Prediction: Cisco announces that it is acquiring Sun Microsystems by June 30, 2009. This prediction will be juged on official announcements coming from either Sun or Cisco. Cisco does not need to close the acquisition by this date for a favorable ruling.
Image: World Economic Forum/Flickr
Price History
Prediction Statistics
| Betting Closes: | Jun 30 2009 | Current Consensus: | 5.73% | Total Bets: | 29 |
| Today's Change: | 0% | ||||
| Life Time High: | 48.75% | ||||
| Life Time Low: | 5.73% |
Comments
Cisco announcing its blade version in its plan for entrance into the server market. With this news, any rumors about acquiring Sun Microsystems is dead.
http://www.nytimes.com/2009/01/20/technology/companies/20cisco.html?_r=1
http://www.computerworld.com/action/article.do?command=viewArticleBasic&...
http://www.theregister.co.uk/2009/01/20/cisco_servers/
I don't understand your reasoning,
If this was the case why would Google have bought Youtube...they already had Google Video didn't they.
HP and Compaq also come to mind.
if anything i think this increases the likelihood, it shows that Cisco are interested in this market and that they see the synergies that exists between their respective products
@Che, Google Video is nowhere the stature of YouTube (in many metrics). Sun Microsystem is no longer a leader in the server business in a crowded competition with IBM and Dell.
What does make sense is IBM to swallow up Sun to solidify its position. This is now beginning to brew again as reported by WSJ that IBM in Talks to Buy Sun in Bid to Add to Web Heft
Regardless, this is probably the last nail on this prediction.
I have the same prediction ( but before reading this article ). IBM and Sun have lot of
overlap and IBM is already good at things it does. It's not like Google Video and YouTube
where Google needed the popularity of YouTube to succeed.
Besides, how can Cisco compete head on in the Cloud computing space with big giants
like IBM, HP, Google and Amazon without a big acquisition ? I think, today's IBM announcement
makes it clear that IBM started feeling insecure with the Cisco announcement and wanted
to not let Sun go away.
From the employment standpoint, Cisco and Sun combination is good as not much overlap
means not many layoffs. If IBM deal goes through, there will be massive layoffs.
All in all, I think, now there will be a bidding war between cisco and IBM and things will get
interesting for Sun, SO, I stand by this prediction.
From a management perspective, acquisition leading to some level of attrition is one 'easy' way to improve the books, So, IBM acquiring Sun will:
1) Reduce labor costs (due to overlap)
2) Acquisition of Intellectual Property Asset and revenue from IP licensing (IBM Is very big on this)
3) Reduced competition (one less competitor)
4) Getting Sun at bargain prices (offered price is 100% premium on Sun stock)
Also, the trend is virtualization and that is exactly what Cisco had announced recently and Cisco is proposing an ecosystem to do just that without incurring the huge expense of an acquisition.
Judged negative. Cisco didn't even show up to the dance.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/the_standard
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