Defections Batter Sun Microsystems - Page 2

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IBM has a program called the Migration Factory, an effort begun three years ago following the 2003 acquisition of Sector 7, a company that specialized in migrations, be it hardware, operating system or applications.

The Migration Factory has done about 1,800 migrations, around 125 per quarter steadily for three years, generating a half billion a year in revenue. About 40 percent of those migrations were from HP and 40 percent were from Sun. Starting last year when Sun began to crumble, that number began tilting against Sun.

IBM launched the Power Rewards Program, which offers between $1,000 and $8,000 per core in credit for migrating to IBM hardware. A Sun UltraSparc CMT, with eight cores, means $64,000 in credit per chip to be applied to migration services, a compelling offer.

Since then, IBM is getting all the business it can handle. It has scored 170 Sun customers in the first six months of this year, plus another 66 Sun storage customers. And Handy hasn't even gone after Sun's biggest customers that spend $70 to $100 million a year with Sun at this point.

"I think it's close to implosion at this point," said Handy. "Ninety percent of the business partners and 70 percent of the ISVs are saying they want to move and work with us… it's just going to come down."

It's not a surprise to Farina, "Everything from Oracle and Larry Ellison has been that they are keeping Sun hardware and the technology roadmaps remains, but that's still a big question out there," he told InternetNews.com.

"You want somebody that's going to be there and there are too many questions around Sun and what's going to happen."

IBM has always been willing to be aggressive with its hardware, using it almost as a loss leader to get services and software business, where the real profits lay.

"Sun is down and IBM is taking advantage of the situation to win that business, because the net of it is it's great to get the hardware business but they are getting the long-term services and software business to go along with it," said Farina.