Hardware

Return to Article

Sun Comes Up on Belgian Acquisition

James Rogers

Sun Microsystems (JAVA Quote) has snapped up Belgian software specialist Q-layer, as the troubled tech firm prepares to immerse itself in cloud technology.

Cloud services, which offer computer power and storage via the Internet, are expected to be one of the 2009's top technologies as users struggle with shrinking tech budgets.

Sun, which faces stiff competition from Hewlett-Packard (HPQ Quote) and IBM (IBM Quote), is also struggling with falling sales and an increasingly tough economic climate, resulting in a recent slew of job cuts.

In its recent fiscal first-quarter results, Sun posted a $1.7 billion net loss, along with a hefty writedown. During the quarter, Sun's computer-system sales fell 15% year over year, while sales of storage systems grew a scant 0.4%.

Clearly keen to open new revenue streams, Sun has acquired Q-layer for an undisclosed fee, and plans to make the Lochristi, Belgium-based firm part of its cloud computing division.

Q-layer touts its software as a way to simplify cloud computing, enabling users to quickly deploy server and storage applications in the cloud. Founded in 2005, the startup opened its first U.S. office in Mountain View, Calif., last year, and lists virtualization giant VMware (VMW Quote) as a partner.

"Q-layer's technology and expertise will enhance Sun's offerings, simplifying cloud management and speeding application deployment," said David Douglas, Sun's senior vice president of cloud computing, in a statement Tuesday.

The deal will not be material to Sun, according to the Santa Clara, Calif.-based tech giant, although Q-layer's technology will feature prominently in the company's future cloud strategy.

Sun already offers cloud-computing solutions for the MYSQL database management system, and Q-layer's software could also form part of Sun's "Project Caroline" research and development effort, a hosting platform aimed at small and medium-sized Software-as-a-Service (SaaS) companies.

Cloud computing is certainly gaining momentum at the moment.

Even the Department of Defense has thrown its weight behind cloud technology, which is championed by the likes of EMC (EMC Quote), Amazon (AMZN Quote) and Google (GOOG Quote).

Sun's rivals Hewlett-Packard and IBM have also been ramping up their cloud efforts, and Microsoft(MSFT Quote), recently unveiled a cloud-based version of Windows, underlining the technology's growing popularity.

However, cloud computing is not without its challenges, and it was recently cited by Microsoft as one of security professionals' biggest headaches. Outages, such as those suffered by Amazon's S3 offering, also have focused attention on the reliability of cloud services.

Sun is not the only tech firm looking to bolster its cloud story through mergers and acquisitions. Storage giant EMC, for example, bought some parts of software specialist SourceLabs for an undisclosed fee.

SourceLabs, which develops technology to support and manage open source software, is also parting company with some of its employees, who will join EMC, according to media reports. A spokesman for the storage firm confirmed that the SourceLabs assets and employees will be integrated into EMC's cloud infrastructure group.

Shares of Sun closed Wednesday's trading session up 12 cents, or 2.4%, to $5.09.