IBM elephant swallows Sequent mouse: IDC

Information has been slow to flow through to Sequent's Australian office following news of its acquisition by IBM.

Nick Lambert, managing director of Sequent Australia and New Zealand, said his company had been in talks with IBM for around a year. The talks initially revolved around an original equipment manufacturer agreement with Big Blue.

Other than saying Sequent's local staff were "extremely excited", Lambert revealed little else about the acquisition.

It is likely that Sequent will remain a separate entity, but its brand would eventually become IBM, he said.

The $1.2 billion ($US810 million) acquisition was the subject of much industry speculation and rumours since early last month.

The acquisition bodes well for Project Monterey, an industry effort to produce a Unix operating system for the 64-bit platform. IBM and Sequent were working closely on the project, along with Santa Cruz Operation (SCO) and Intel.

On the local front Graham Penn, general manager of research at IDC Australia, described the merger as "a win-win situation" for both parties.

"IBM didn't have an Intel-based product which could compete in the mid-range server market, and this gives it the product to pitch into that market," Penn said.

Penn also said partnering with IBM would give Sequent more clout and wider exposure for its NUMA server architecture.

"In many ways, this justifies the heroics Sequent has gone through over the last five years to develop its NUMA-based products," Penn said.

According to Penn, the IBM-Sequent deal "ups the ante" for IBM's competitors, Hewlett-Packard, Sun and Compaq.

"It puts pressure on IBM's immediate competitors because they don't have products in this space," he said. Penn also noted that the industry will be watching closely to see how the two companies go about combining their operations.

"We're talking about an elephant and a mouse," he said.

"One is a far smaller organisation, and very focused, and the other is broad-based. It will be interesting to see whether they do integrate or whether they'll keep them as separate businesses."

Penn said that integrating the companies should result in few conflicts and he expects to see a reworking of the companies' business models.

Representatives at the local arm of SCO, one of the founding members of Project Monterey, were supportive of the merger.

Scott Caulfield, marketing manager at SCO Pacific, said his company welcomed the merger, and claimed it can only benefit Project Monterey.

"SCO and Sequent have been working toward a common goal for some time, and the merger should enhance our work to develop a 64-bit Unix operating system for Intel's IA-64 architecture," he said.

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