Correction, 11:08 a.m. PDT: This story initially misstated the source of a report about Southeastern. It is IDG.
Something is about to happen at Sun. Unfortunately, no one outside the company seems to know what that "something" is.
As reported in Barron's, Southeastern Asset Management, Sun's largest institutional investor, just upped its stake in Sun to 21.2 percent and recently filed with the U.S. Securities and Exchange Commission to indicate that it has significant plans for Sun:
The filing says that Southeastern "has talked to" Sun's management, and will have additional conversations with Sun and potentially with third parties "regarding opportunities to maximize the value of the company for all shareholders." Interestingly, the company with this filing changes the status of its filings from 13G, which implies a passive holding, to 13D, in order to "obtain the flexibility to discuss various alternatives."
Is Southeastern planning to take Sun private? Sell off major assets like StorageTek, for which Sun recently had to write down a massive amount of goodwill? Or is it planning to install a new CEO?
No one outside Southeastern seems to know what it has in mind, though IDG has reported Southeastern's belief that Sun is a software company, not a hardware company, and that may mean that Sun hardware will get the boot. Could Sun's increasing focus on open-source software generate outsized returns in the short term? It's unclear, though Larry Dignan of ZDNet is doubtful.
One thing is clear: Sun may look like a very different company over the next six months. For Sun investors, that may be very positive. For its employees...? That's potentially a different story.
The Register's Ashley Vance started stirring the pot with the suggestion that Fujitsu should buy Sun, given that its market capitalization is down to $7 billion. IBM's Savio Rodrigues steered clear of suggesting that IBM would be a fit (too much overlap), but veers toward an HP acquisition.
Me? I think if someone were to acquire Sun, EMC would make a lot of sense, even despite Sun's StorageTek overlap. That could be spun out and sold. I think the combination of EMC storage hardware and Sun's Solaris hardware could prove a tempting combination for financial services, pharmaceutical, and other technology-intensive industries.
Like Savio, I doubt Sun will be consumed, and I continue to cheer for Sun to succeed. But in our consolidating technology world, that simply may not be on the cards.
Sun Microsystems continues to run amok in the open-source world, open-sourcing software in every direction. Today, it is in the direction of digital-archiving software, which has been used to capture and maintain "business images, records, consumer- and corporate-created digital content, e-science work, and high-performance computing (HPC) data for hundreds of years."
How does Sun expect to make money? In this case, it's the hardware, which makes a lot of sense:
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