Storage giant questions Sun's planned US$4.1b merger
With its dotcom heyday a distant memory, Sun Microsystems is betting big on storage - it has proposed a US$4.1 billion merger with Storage Technology Corp (StorageTek) - to fuel new growth.
But storage industry giant EMC yesterday expressed doubt that the deal would make any difference.
'This deal is largely about Sun's need to return to profitability,' said Steve Fitz, president at EMC Asia-Pacific and Japan. 'It remains to be seen how relevant the acquisition will be to the storage industry or customers.'
Sun said the deal would create a new global leader in comprehensive network computing and data management - offering an extensive range of products and services to securely manage all data assets of an organisation.
StorageTek has about 36 per cent of the world's archived storage data market.
Paul Li Wing-hei, Sun's marketing director for Greater China, said: 'Sun will be well-positioned to help customers better manage their growing privacy, security, compliance and policy requirements.'
Collectively, the two firms posted total annual revenues of more than US$13 billion in the past year. The acquisition is expected to close late this summer or in the autumn.
Tom Zack, vice-president for Asia-Pacific marketing and operations at Hitachi Data Systems, said the immediate benefit for Sun would lie in the more than 1,000 salespeople and over 2,000 storage services professionals from StorageTek increasing its distribution presence worldwide.
Mr Fitz saw the scenario differently. 'These are two struggling organisations banding together,' he said. 'Sun has not been profitable on a yearly basis for the last four years and StorageTek has been at approximately US$2 billion in revenue for at least the last five years.'
