If any of you are still holding Sun stock, hoping for a comeback, Sun’s acquisition of StorageTek is dire news.
In the last ten years Sun’s storage group has managed to cut its attach rate by half – to the lowest for any major system vendor – so most storage on Sun systems doesn’t come from Sun. And storage is much more profitable than servers.
The storage group’s history with acquisitions is chilling. In the last decade they’ve bought a number of companies for something on the order of a billion dollars, not counting Cobalt ($2B) which didn’t become part of the storage group:
- Red Cape: policy-based storage management-no product
- Encore: the A9000: A truly epic fiasco – all returned
- Max Strat: supercomputer guys building storage for Windows bought by a Unix company: Frankenstorage
- HighGround: Windows-based storage management-was there ever a product?
- Pirus: which took 18 months to become an underperforming product, but they are still plugging away
- Procom: NAS software – for the company that invented NAS with NFS?
None of these purchases was successful and some were complete failures, although the jury is out on Procom. Perhaps the 7th time is a charm?
Against this background look at StorageTek: a mainframe culture company (nimble they are not) with large sales through OEM agreements with Sun competitors (buy stock in STK competitors! Quantum should do well, for one) and a technology base in the non-growth tape market. One big plus: shipping products that work. But on the whole unpromising.
And for this Sun is using half of its cash to fund the buy. If it makes so much sense, why didn’t STK want Sun stock?
Whatever happened to the old bomb-throwing McNealy who would have delighted in using open standards, commodity hardware and clever software to overthrow the cozy oligarchy of high-margin storage companies? Can’t beat ‘em? I guess he’s hoping to join up.