$7b IBM-Sun deal would mean big things for telecom

The Wall Street Journal reports that tech giant IBM is in talks to acquire Sun Microsystems for $6.5 billion.

If it goes ahead the deal would have major implications in telecom markets.

The WSJ is casting the possible deal as having the potential to ignite more acquisitions in the data center, cloud computing and IT services and communications worlds - though arguably, some of that has already happened.

Hewlett-Packard last year bought EDS, and Cisco Systems acquired Nuova Systems, and both HP and Cisco have since made strides particularly in the data center area, with Cisco announcing a new set of servers just this week. IBM may be looking to one-up those moves.

At the same time, it will be interesting to see what happens if these three giants - IBM, Cisco and HP - dance away to their own competitive tango. All three are important partners to telecom network operators, and in this complex world, also can emerge as competitors to the carriers at times.

Carriers increasingly are interested in offering their own cloud computing services, which is one of the key areas in which an IBM-Sun combination could become very influential (cloud computing itself suggests the Sun mantra "The network is the computer.")

Indeed, Sun has just announced its own cloud computing platform. The Sun Cloud Storage Service and Sun Cloud Compute Service will both launch mid-year.

Sun hopes to differentiate its offerings by touting their ease-of-use and interoperability with current enterprise IT systems, as well as other clouds, the New York Times said.

Customers will be able to use sun's data center management software to manage their cloud, which will allow them to build up a virtual data center within a dashboard, instead of being forced to rely on command line APIs.

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- The Wall Street Journal has this