Sun readying itself to be carved up?

Company's restructuring may dovetail nicely with its investment from KKR. It's possible that going private could be on Sun's near-term road map.

Sun Microsystems' announcement Friday of up to 6,000 layoffs is packaged as part of a bigger restructuring.

The company's reorganization divides its software operations into application platform software, systems platforms, and cloud computing and developer platforms.

Could this foretell a carve-up and sell-off of different Sun business lines? Could this lead to going private?

Back in early 2007, Larry Dignan of ZDNet suggested on Seeking Alpha that KKR's $700 million investment in Sun could be a prelude to Sun going private. KKR investment or not, going private may be exactly what Sun needs now in order to buy itself time to accelerate its growing open-source software businesses.

Sun definitely needs time . It is experimenting with its software business model(s) , and to good effect. Sun CEO Jonathan Schwartz has been right to bet on open source and is spreading his bets further with things like auctions around OpenOffice branding rights. Sun's experimentation is paying dividends. It's just not enough to stem the hemorrhaging from its old product lines.

So, Sun needs time. It also needs space.

It needs time away from Wall Street to grow its open-source software business. It needs space from old product lines that are on the wane.

Let it sell its hardware business to a Fujitsu or some other company, so that Sun (and Schwartz) can finish its software revolution.

Tech Culture
About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.


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