Bill Gates, Microsoft's Chairman said "It's time to kill Unix. Unix is providing stiff competition to Windows NT in the server arena. We have already placed NT on Digital and HP servers, and Sun was the only substantial holdout. So we decided just to purchase Sun to assure that their servers ship with NT." He continued, "We also wanted control over Java to better position ourselves to, uh, compete with Netscape."
The deal was approved earlier today by the boards of both companies. Large institutional holders of Sun are known to favor the deal so it should get shareholder approval in the coming weeks. Privately, a Sun board member said "the price was so sweet, we would be violating our responsibility to the shareholders if we didn't accept the offer." Scott McNealy, Chief Executive Officer of Sun, was unavailable for comment. Several Sun employees expressed dismay, one adding simply that "this sucks."
When asked about transition plans for Solaris, Sun's version of Unix, Taj Raji, Sun's Vice President of Systems Software, said that the "Solaris APIs will be wrapped around the NT megakernel in a seamless fashion to produce a robust feature-rich operating environment." A Microsoft spokesperson quickly added that "only native NT applications certified by Microsoft get to use the flying windows logo."
Speculation about Intel's possible involvement centered on the SPARC chips that power Sun's servers. Intel might incorporate the SPARC architecture into their planned Hexium "You're Inside" family of processors. If these chips were used in Sun servers, analysts say that Intel would lock up the worldwide processor market.
As for Sun's Java technology, if Microsoft follows their standard practice, they will make proprietary enhancements to assure market share. One insider suggested that they might make "Java more like C++", but others said that would be foolish. April Austin, a technology analyst with Hambust-Quick in Oakland CA, commented that "the buyout could really put a crimp on Netscape since Microsoft will control the two major means of placing active content on the web, ActiveX and Java. Microsoft will set the standards and Netscape will always be six months behind the feature curve."
A spokesperson for the Department of Justice said there was no official comment on the proposed transaction. Although, a highly placed Justice source felt that there shouldn't be any problems because "Microsoft is a software company and Sun is a hardware company." The combined company's yearly sales will be approximately $16 billion based on end-of-year figures. For the day, Microsoft (MSFT.O) was up 1 5/8 at 97 7/8 and Sun (SUNW.O) was up 3 3/4 at 34. Officials at the Pacific Stock Exchange reported that the volume on Sun April 30 calls was 15 times normal. The SEC is investigating possible insider trading.