June 02, 2005
Sun Acquires StorageTek for 4.1 Billion USD
Pressured by IBM, Dell and HP on the hardware front, Sun has to find new ways to generate revenue, and if possible some profits along the way. As a good storage solution was a key hole in Sun's offering and because Sun has loads of cash, this acquisition does not come as a surprise. The big surprise is the 4 billion dollars that Sun wants to pay for StorageTek. While this reduces Sun's cash pile by 40%, it also adds about 1000 salespeople to Sun's workforce, which - according to most analysts - should be drastically reduced if Sun wants to become profitable again.
But what Sun wants to do with this acquisition, is give a strong message to its larger customers that they should not look elsewhere for data archiving, data protection and regulatory compliance solutions. Whether that will be worth the high price of this acquisition, remains to be seen.