Ballmer: IBM-Sun Deal Could Help Microsoft
A union between IBM and Sun Microsystems would give Microsoft a competitive advantage during the time IBM worked to incorporate Sun's copious assets into a combined company, Microsoft's Steve Ballmer said Thursday.
Thu, March 19, 2009
IDG News Service — A union between IBM and Sun Microsystems would give Microsoft a competitive advantage during the time IBM worked to incorporate Sun's copious assets into a combined company, Microsoft's Steve Ballmer said Thursday.
"We have a lot of competition with IBM and I don't think it will change strategically," he said during an appearance in New York. "I think it gives them a year or two where all they're doing is digesting it. I relish that year."
Ballmer commented on a possible IBM-Sun deal -- reported by The Wall Street Journal on Wednesday -- at the 2009 Media Summit during a keynote in which he responded to questions from BusinessWeek Editor in Chief Steve Adler.
Microsoft's CEO called a purchase by IBM a good "exit strategy" for Sun shareholders, but questioned why IBM might want to purchase Sun. The company has a complex product portfolio, which includes a range of hardware and software products, many of which overlap with IBM's existing portfolio.
"I think you pick up a lot of stuff when you buy Sun," he said. "I think you have to decide if you want everything."
Microsoft has long been a competitor of IBM and Sun, but less so with the latter as the company has floundered over the last several years. Microsoft and IBM compete on a range of business software products, including middleware, application-development infrastructure, database technology and collaboration and workgroup software.
Microsoft's most famous association with Sun is a bitter, seven-year antitrust lawsuit over the Java software-programming language. The two companies resolved the suit in April 2004, with Microsoft paying Sun US$2 billion to license Java.
As for the possibility of more acquisitions in Microsoft's future, Ballmer said the company will likely make "10, 15 or 20" small acquisitions -- which he characterized as sub-$500 million and which he said don't necessarily even need his approval -- in the foreseeable future. But Microsoft will probably continue its traditional strategy to keep acquisitions under $1 billion for the same reason that he thinks IBM will struggle with absorbing Sun -- big acquisitions are extremely complex, he said.
An exception to that rule -- Microsoft's $44.6 billion bid to purchase Yahoo last year, which so far has not been successful -- was also on the discussion table Thursday.
Ballmer reiterated his stance that Microsoft is open to some kind of search deal but not a full acquisition. Though they have spoken on the phone, Ballmer said he has not met face-to-face to discuss such a deal with new Yahoo CEO Carol Bartz since she took over in January.
