McNealy cashes in his chips
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Sun surprises market by developing Intel-based servers.
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The one certainty about definitive strategic promises it is that they will come back to haunt you. Scott McNealy, CEO of systems giant Sun Microsystems, became the latest in a long line of IT executives to prove this rule last month when he unveiled a low-cost Linux server range based on - deep intake of breath - an Intel processor, rather than AMD's 64-bit processor line as expected.
It was not quite the U-turn that some commentators have suggested, however. Over the years, McNealy said only that Sun would never go over to the 'Wintel' camp by making servers based on Intel chips and running Microsoft's Windows operating system. A decision by Sun to embrace Windows - now, that really would be a volte-face to rival any in Silicon Valley's history.
The move to build Intel-based as well as Sparc-based machines comes at an interesting time for Sun. Some analysts are clamouring for McNealy to step down and a new management team to take the company in a new direction. Meanwhile, speculation that Sun could be a takeover target continues to sweep through financial circles. Its $5 billion cash pile is a selling point but a market value in mid-May of around $13 billion would clearly rule out most suitors. In all probability, IBM would not be interested, HP could not afford it and anyway has enough on its plate with Compaq, sometime partner Fujitsu would baulk at the strategic challenge and Dell is doing just fine on its own.
So does this mean that an acquisition of Sun can be ruled out? Perhaps. But as McNealy himself can testify, you should never say 'never'.
