Sun Microsystems’ share price has nearly doubled since Wednesday on rumors that IBM
is interested in acquiring the troubled hardware maker. For many old-timers Sun
workstations were the first non-proprietary hardware on which CAD software was available
and their introduction marked a huge change in the economics of the industry. Before Sun,
CAD companies sold hardware and often steeply discounted the software to make a
hardware sale. After Sun workstations came on the market, the CAD focus moved to
software, aided by graphics accelerators and other specialty gear. [Disclaimer: I worked for
Computervision, a CAD company that was still builing its own hardware when I joined. Sun
workstations were both hated and desired: a very "hip" enemy with sleek UNIX
workstations that were in sharp contrast to our clunky boxes.]

Sun was founded in 1982 and originally built a hugely successful business selling
workstations and later servers fueling and fueled by the growth of the Internet. The
company struggled over the last ten years because much of its business is still derived
from high-end servers and storage systems — hard to sell as large enterprises explore
other, cheaper compute options. Sun has been trying to reinvent itself yet again by
focusing on open-source software and offering new hardware that relies on solid-state
memory. It’s also trying its hand at offering cloud-computing services, but these new
initiatives make up only a tiny proportion of overall revenue.

Why is IBM interested? Sun would bring the super-cool Java programming language and
other software products to IBM’s portfolio. Too, IBM has increasingly concentrated on its
higher margin software and services businesses which likely could benefit from Sun’s data
center expertise. There is, however, quite an overlap in the two companies’ hardware
offerings and many on Wall Street see the combination as disadvantageous for that

It Sun is acquired (and neither company has commented so far), it would mark the end of
another pioneering brand — like Computervision, gobbled up because it couldn’t adapt.