Quote:
A Wall Street analyst has suggested a partnership between Dell
and Sun Microsystems would help both companies with their server
strategies.
In a report Wednesday, Sanford C. Bernstein analyst Toni Sacconaghi
said that joining forces could help Dell reverse recent server market
losses for machines running Linux and for higher-end models using x86
processors such as Intel's Xeon. And Sun could gain an ally selling its
Solaris version of the Unix operating system and its x86 servers using
Advanced Micro Devices' Opteron processor.
"As radical and unlikely as it might sound, a partnership between Dell
and Sun could be mutually beneficial," Sacconaghi said. The partnership
could be modeled after the successful pairing of Dell with EMC to sell
higher-end storage systems, he said.
"It is far from clear that the leadership of either company could
stomach such a deal," Sacconaghi added. "This being said, the fact that
Sun and Microsoft could put aside their differences so quickly (as did
Dell and EMC) proves that it is possible."
The technology industry is consolidating into fewer, larger companies
with acquisitions and potential purchases of businesses such as MCI,
Retek, PeopleSoft, Veritas Software and Compaq. But that doesn't mean a
Sun-Dell alliance would be easy.
The companies have several profound differences. Dell scorns big
iron--the high-end servers that are a Sun specialty. And where Sun
prides itself on its in-house research and development, Dell boasts of
extreme efficiency in assembling technology from suppliers such as
Intel, Microsoft and Red Hat.
Dell reacted coolly on the idea. "Our success...in the x86 market is
due to our unwavering focus on our customers. Customers' growing
preference for Windows and Linux on x86-based systems from Dell
continues," spokesman Bruce Anderson said. And Dell recently decided
against employing AMD's chips.
Sun declined to comment.
Sacconaghi believes direct competition between the companies has waned
as Sun has dropped Intel servers and de-emphasized Linux in favor of
Solaris. Through an alliance, Dell could compete better against IBM by
beefing up higher-end x86 servers with Sun's Opteron-based Galaxy
servers.
"Dell's enterprise business is a critical growth driver for the
company. Re-accelerating this growth rate is a key priority for Dell,
and servers are critical because they represent over two-thirds of
enterprise revenue and drive most of storage revenues," Sacconaghi
said.
And Sun could get a shot in the arm as it tries to expand into the x86
market. "As both the total Unix hardware market and Sun's Unix hardware
revenues have declined every year for the last three years. growth in
new in x86 hardware has become a key component of Sun's overall growth
story," Sacconaghi said.
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Analyst suggests Dell-Sun alliance | Tech News on ZDNet
http://news.zdnet.com/2100-9584_22-5606971.html
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