One of the main reasons IBM is willing to pay a premium for Sun is that Sun owns Java, and Java IP is worth billions in future revenue to IBM.
If IBM succeeds in acquiring Sun Microsystems, it will lay to rest one of the bitterest rivalries between erstwhile allies that the industry has seen in a long time.
Insiders close to both companies suggested this week that IBM is in talks to buy Sun for $6.5 billion. Both companies have officially denied the reports as speculation.
One of the main reasons IBM would be willing to pay a premium for Sun is that Sun owns Java, and Java IP is worth billions in future revenue to IBM. IBM's software lines, such as WebSphere and Rational, are heavily Java-based. Yet IBM doesn't pay Sun annually for a Java license -- or at least it didn't in the late 1990s when a dispute broke out between Sun and IBM on that point. Sun said all commercial Java vendors needed a license; IBM responded that its early Java agreements with Sun covered its existing uses of the language.
It was a sign of how much IBM's early commitment meant to Sun that IBM could make such a rejoinder. Sun grumbled and rattled the license saber occasionally but IBM bided its time and kept its lawyers primed. It was one of several sources of tension between the two companies most responsible for establishing Java. Now it's the language believed to be taught in more computer science classes than any other.
Another tension was over Java tools. Sun found itself in conflict with other members of the Java coalition as Sun gained early traction with products incorporating the latest Java -- developed inside its halls. Other tool vendors, who also helped get Java established, objected. Sun backed away from offering Java tools and established a quasi-open Java Community Process, where control over additions to Java would be shared in working groups and review committees.
When it re-entered the tools business, IBM took a programmer's workbench that it used internally and in 2001 made it open source. The workbench allowed different tools to plug into a shared environment and exchange files. With Eclipse, so named because it was meant to eclipse Sun's new tools drive, IBM established a rallying point for Java tool vendors in their competition with Microsoft. So many different toolmakers flocked to Eclipse that Sun found its huge investment in tools not yielding the return that it had hoped. Eclipse's success may have been Java's success, but Sun's tools initiative suffered and Sun never joined the group.
Now, if IBM acquires Sun, one of the decisions it will have to make is whether to add Sun's NetBeans tools to its product line. Chances are, it would leave it independent as an open source starter kit that would bring more developers to Java, and, eventually, to Rational.
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