Sun acquisition to boost IT services portfolio

Sun Microsystems has agreed to purchase IT services company SevenSpace, the companies announced Monday. With the purchase, Sun takes a further step away from its traditional focus on supporting only its Solaris operating system platform and beefs up its support for competing operating systems like Windows, HP-UX and AIX.

SevenSpace, a four-year-old company that specializes in remotely managing and monitoring IT systems and applications, was of particular interest to Sun because its managed services technology will let Sun's support organization provide service level agreements for software from vendors like Oracle, SAP, and PeopleSoft on a wider variety of operating systems, said Scott Woods, vice president for customer integration with Sun.

"We've been primarily a Sun-based shop," he said. "This gives us a full range of heterogeneous capabilities from the physical network layer all the way up through applications."

These capabilities will make Sun more competitive with industry heavyweights Hewlett-Packard Co. (HP) and IBM Corp., which already provide similar managed services offerings, Woods said.

"We've been playing in the edges of remote managed and monitoring services, however we had limitations in our current product that were keeping us from being competitive," Woods said.

Though managed services vendors have been struggling, the market has been showing positive signs recently, said William Martorelli, an analyst with Forrester Research.

Managed services has been one of the fastest growing divisions within HP, for example, which saw 35 percent growth in this area during its most recent quarter. And Cisco Systems recently invested in managed services through the acquisition of network monitoring company NetSolve.

SevenSpace's remote management technology, and not its staff of approximately 100 employees, ultimately may be the most interesting component of the deal for Sun, Martorelli said. The technology could, for example, be integrated into Sun's existing services offerings, he said.

Woods declined to comment on Sun's strategy but said that details would be provided after the close of the acquisition, which is expected to occur by the end of March 2005.

The companies did not disclose details of the agreement, except to say that it was a cash transaction.

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