Hi Robert - This just off the news wire. A very interesting move by SUNW
(http://cbs.marketwatch.com/news/current/inkt.htx?source=htx/http2_mw)
Inktomi gains on possible Sun deal
By Mike Tarsala,
CBS.MarketWatch.com
Last Update: 5:41 PM ET Feb 8, 2001
PALO ALTO, Calif. (CBS.MW) -- Shares of Inktomi gained
10 percent Thursday on speculation that the software maker
is talking to Sun Microsystems about building Internet-caching computers.
Analysts say that Sun, using its Cobalt brand name, could become the first major computer maker to offer Inktomi's
software as the heart of a so-called caching appliance. Silicon Valley stalwarts Intel (INTC: news, msgs) and 3Com (COMS: news, msgs) already use Inktomi's software to offer such computers that connect to a network to temporarily store frequently-accessed files and Web pages.
"It's a logical strategic partnership for Inktomi(INKT: news, msgs), given their strong relationship with Sun (SUNW:
news, msgs), and their push into the enterprise," said Alan Adler, analyst with Friedman, Billings, Ramsey & Co.
Analysts said speculation about a deal with Inktomi surfaced at Sun's analyst meeting this week in San Francisco. While the company didn't expressly tell analysts it's inked a contract with Inktomi, Sun said it plans to expand its
relationship with the software company, according to Nitsan
Hargil, analyst with Kaufman Bros. in New York.
"They are, in my opinion, no more than a couple of quarters
from heading full-force in this direction," Hargil said.
Scott McNealy, Sun's chief executive, also told analysts at
the conference that Sun is looking for ways to expand its
lineup of single-purpose computers, known as appliances.
Any possible agreement with Sun could help Inktomi sell
more of its software to large businesses -- key to the
company's long-term strategy. But it also could help Sun,
which is looking for new ways to grow after it posted
disappointing revenue in the fourth quarter.
The companies have not signed a formal agreement to build
Internet caching appliances, according to Steve Diamond, an
Inktomi spokesman. He did say, however, that Sun is in talks
with a number of hardware companies.
"All I can tell you is to stay tuned," Diamond said. "Once have an announcement to make, we will be very eager to make those announcements."There's no near-term deal with Inktomi close enough to talk about, said Ingrid Kambe, Sun spokeswoman. She noted that Sun and Inktomi already are working together to offer broadband services. Other than that, "There's not anything that we're talking about as far as a hardware bundle with Inktomi."
Last month, Sun first announced products that use its Cobalt
name, which it acquired by paying $1.3 billion for Cobalt
Networks in December. Breaking with its tradition of using its own brand of chips and software, Sun unveiled Cobalt
computers in January that use chips from Advanced Micro
Devices running Linux.
Sun came out with two Cobalt-brand server appliances: One
is designed for companies that host Web sites. The other is a machine for caching.
The appliance market, could be more than a billion-dollar
market opportunity for Sun, analysts said. But it also is a
threat for the company, since inexpensive appliances could
cut into higher-profit sales of Sun's general-purpose servers. It's one reason some say Sun is reluctant to offer server appliances under its own name.
"It's like Cadillac bringing something out in the subcompact
line," said Rob Enderle, market analyst with Giga Information Group. "They have established themselves as a premium brand, and appliances are at the low end of the market."
It's why Sun may choose to offer Inktomi-based appliances
under its Cobalt brand.
"The difference is in the message," Enderle said. "They won't be diluting their premium products."
Shares of Inktomi gained $1.31 to $14.19 in Nasdaq trading
Thursday. Sun Microsystems shares fell 69 cents, or nearly 3
percent, to $25.88.
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This could be a big win for SUNW and their Colbalt line. I wonder if they plan to configure Colbalt to be a Home entry level server to monitor all those GE appliances. If that is the case, we should look for a broadband ISP company w/ SUNW servers....the only one that comes to mind is AOL/Time Warner perhaps through I-Planet.
Very interesting developments....CEO Mc Nealy does have an agenda but I just dodn't have all of the pieces of the puzzel yet to put it all together.
EKS |
