IBM/Sun Microsystems merger talks collapse

School of Management Professor N. “Venkat” Venkatraman, chairman of the Information Systems Department, says the breakdown of the merger talks between IBM and Sun Microsystems is bad news for Sun.

“I am wondering if HP or Dell may get into the fray now that IBM seems to be walking away.  Both could benefit from having Sun as part of its portfolio.  Or will it be a case, like Yahoo, with the board appointing a new team to develop an alternate course of action?

“It is clear that Sun is too small to be a dominant force in the transformations under way.  I thought that the IBM-Sun combination was a good one for both players and IBM’s premium was attractive to Sun.  But clearly, there are hidden details and contractual conditions that have forced IBM to take a step back.

“The breakdown is more of a problem for Sun than for IBM now.”

Contact N. “Venkat” Venkatraman, 617-353-7117, venkat@bu.edu

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