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Posted on Friday, May 5th 2006

Read this article by Owen Thomas on why Sandisk should acquire Kodak. It’s a good analysis of what’s going on in the Storage market, and how they become some of the biggest beneficiaries of the digital entertainment book and the growing importance of digital photos, music and movies.

Also read this article by David Kirkpatrick on how Microsoft and Google are about to launch in a spending competition on server and storage hardware and network infrastructure to cater to the world’s hunger for software delivered as a service.

And of course, iPod has been a huge success in packaging storage as a sexy consumer gadget.

In light of all this, what is the conversation between Eric Schmidt and Jonathan Schwartz? Sun has some really sophisticated expertise in data center management and distributed computing. Perhaps, SUN’s return to glory would be in merging with Google, making McNealy’s dream come true by creating the first true challenge powerhouse against Microsoft that includes a credible Enterprise strategy?

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Google acquring Sun makes little strategic sense. The hardware part of Sun is a commodity business that google should not get into. On the software front, Google already has good inhouse IP in datacenter management. They should plug any gaps through partnerships or acquire from startups on the cheap. Google is redefining the ‘network is the computer’. There is no reason to pay billions for the Sun legacy.

Raja Sunday, May 7, 2006 at 2:15 PM PT

I think the Hardware and the Chip businesses of SUN will go the route of IBM-Lenovo, i.e. to China. This set of sales should fetch further cash beyond the $2B already in the kitty. SUN’s Enterprise Channel and Brand could be very useful if Google has to compete with Oracle, SAP, and Microsoft in selling SaaS to Enterprises. Today, the Google sales force operates more as order-takers than sales persons. This will need to change if Google wants to disrupt the existing order of business in the Enterprise.

However, the math will depend to a large extent on the financial engineering of the divestatures, etc.

Sramana Mitra Sunday, May 7, 2006 at 4:06 PM PT