Analysis: How an IBM/Sun deal could change the IT industry

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Sun's sale, he said, can be attributed directly to the economic downturn, not to poor strategy on the part of its leaders.

Currently, most of Sun's revenue comes from large enterprises around the world. “What they were seeking to do was shift gradually to a revenue base focused on the Web monsters like Google and Amazon and eBay,” Rymer said.

He added: “They also wanted to be attractive to the next wave of Internet businesses, the social networking sites and Web 2.0 startups. Sun wanted them to use their software in the hopes that as they grew they would come to back to Sun for servers and storage. It was a fine strategy, very pragmatic and clever. But the recession means that the demand just isn't there for those two customer sets to be the kind of growth engine that Sun needs them to be.”

In short, he explained, “the recession got in the way.”

Describing the potential $6.5 billion deal as a “fire sale,” analyst Stiennon said the merged company would have just one piece missing in its bid to regain dominance over HP: networking.

“There's always Nortel just sitting there,” he added. “And they're in the process of being broken up right now.”

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