Sun rebuffs IBM's advances

Plans for a buyout of Sun Microsystems by IBM came to a screeching halt Saturday, the Wall Street Journal reports . On Saturday, Sun's board rejected a formal acquisition offer by IBM and terminated its right to exclusive merger talks. That led IBM to withdraw its offer on Sunday. Shares of Sun's stock fell nearly nearly 23 percent Monday, no doubt making a fair number of people question the struggling computer company's decision to rebuff the bid, which was reported to be as high as $6.5 billion, or $9.40 a share.

For federal agencies, the news won't have much impact in the short term -- just as an acquisition, had it gone through, wouldn't have made much difference. But the news does put to rest, for now, speculation that an acquisition could in the long term result in some consolidation of products lines offered by the two companies, and perhaps enhanced support for Sun customers from IBM Global Services.

That said, Sun remains as vulnerable as ever. Just as companies like IBM or HP consider a Sun buyout to increase their market share in computer hardware, firms like network giant Cisco might see the acquisition as a quick way to expand their portfolio of products to reach new verticals.