Will IBM gobble up the 'Sun'?

Looks like the next big things in the tech industry is the 'IBM-Sun Microsystems' merger. IBM is in talks with Sun and has offered ~6.5 billion. And at the outset, Sun is worth every penny of it. But what does this mean to IBM? How will IBM benefit? 

Sun Microsystems offers an array of services. Its Java programming language for internet computing and Solaris for servers are market leaders. It has an excellent presence in hardware industry too. IBM, on the other hand, is a market leader in software services delivery and data-center technologies. There is an overlap, for sure, but is it complementary? I think so. 

A lot has got to do with Cloud computing. Cloud computing enables corporates purchase processing power as a service, over the internet instead of purchasing and maintaining own servers and services. Cloud computing has vast potential - lower operating expenses, efficiency - processing is left to organizations that specialize managing vast data centers. In spite of these advantages, increase in corporates using cloud computing isn't drastic or even significant. It could be due to security reasons - companies unwilling to share information over the net or to an outside company, and the fact that cloud computing isn't yet scalable to large organizations. 

And here is where Sun fits into IBM's scheme of things. Sun can help IBM in the transition to cloud computing. Sun has announced its cloud computing strategy, Sun Cloud, that has Solaris, low cost servers powered by AMD and open source MySQL. This platform will bolster IBM's standing in data center technology. HP and Dell already compete with IBM in this space. And Cisco is the latest entrant (March 16, 2009). Given Cisco's reputation to reshape the market it enters, IBM has to be cautious. But Sun's innovation coupled with IBM's solid technology packaging abilities and on-demand services definitely sound complementary. IBM can market Sun's innovations more effectively. 

As with any merger, there is certainly an aspect of risk involved in the IBM-Sun merger. Sun Cloud is untested water. But I feel IBM has lot to gain with little to risk going forward with the merger. I don't think any other company is as poised as IBM is to merge with Sun. May be Cisco. Let's embrace for a seismic shift in the tech industry.