IBM may be market leader after Sun takeover

IBM’S reported move to acquire Sun Microsystems for around $6.5 billion could potentially alter the competition landscape in the storage and server market in India.

Media reports have said that IBM could be looking at acquiring Sun Microsystems to consolidate its position in the high end server segment. If the deal goes through, it could easily catapult IBM into the number one position in both server and storage market, much ahead of its closest competitor HP.

A spokesperson for Sun Microsystems India on the likely deal said, “We do not comment on market speculation.” According to industry observers, IBM could potentially gain over 60% marketshare in the non-X86 Unix flavoured server market in India combining along with Sun’s products. IBM already leads HP in this segment. In the X86 server market, HP is number one player followed by IBM.

Similarly in the external storage market, IBM could gain over 40% marketshare along with Sun, overtaking the market leader EMC. However, there are others who argue that there would be nothing complementary for IBM in acquiring Sun as both of them compete very fiercely in the marketplace. It could also lead to certain cannibalisation of the products in the marketplace, if acquisition goes through.

Industry analysts believe that IBM’s reported plans of acquiring Sun Microsystems has nothing to do with Cisco’s entry into the server space as its major competitor is HP.

IBM could also get some high value clients of Sun Microsystems in India, if the deal goes through, especially in the telecom and government segments. Sun Microsystems has also built a very strong base in its open source software and Java portfolio with a large user base among developers and independent software vendors.