StorageTek heading for the Sun

'A massive deal and a very complementary acquisition'

The local heads of Sun and StorageTek are staying tight-lipped about what Sun's planned purchase of StorageTek means for the vendors' New Zealand subsidiaries.

"At this stage, it's nothing more than an offer," says Sun NZ country manager Peter Idoine. "We're two separate companies running separate businesses."

StorageTek NZ country manager David Tse says "for us, it's business as usual until [the deal] goes through the regulatory authorities.

"We have to continue to operate as StorageTek and can't present ourselves to the market as Sun."

If the deal is approved and StorageTek becomes part of Sun, there will be benefits, he says.

"It's a massive deal and a very complementary acquisition."

Sun plans to spend US$4.1 billion (NZ$5.75 billion) buying StorageTek and has cited weaknesses in its own storage product line as the reason for the purchase.

Sun CEO Scott McNealy said in a statement: "With this announcement, Sun solidifies its leadership position with the highest volume computing platforms, the most comprehensive data and identity management solutions and, when combined with StorageTek, an unmatched ability to earn the confidence of customers as they develop, deploy and manage information assets throughout their entire lifecycle."

StorageTek CEO Patrick Martin is also upbeat, saying "by joining forces with Sun to form a combined enterprise with greatly enhanced technological, operational and financial resources, we are positioning that enterprise for accelerated growth and solid performance for years to come."

However, Chris Foster, an analyst at Technology Business Research, is cautious about the deal. "I expected Sun to make an acquisition in professional services or software, and I don't think StorageTek fits that profile," he says.

Foster says the deal is "a step backwards," but another analyst, David Freund of Illuminata, says it's a good move by Sun.

"The fact is, Sun [storage products] had been resource-starved as far as Sun corporate was concerned and frankly, the storage organisation had a credibility problem."

Sun and StorageTek already have a close relationship — they have a global OEM agreement and the two have partnered on some deals in New Zealand.

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