Sun’s CenterRun Purchase To Fill In N1 Strategy

Sun Microsystems Friday officially announced its deal to acquire Redwood City, Calif.-based CenterRun, which specializes in software for managing networks.

As previously reported, Sun said it is making this purchase in part, to fill a gap in its N1 provisioning server strategy. N1 is an integrated system that helps data center operators manage server and computing resources independent of vendor or platform.

CenterRun makes software that enables companies to track and update their
network applications services across a variety of network devices.

Based on data from its latest financial quarter, Sun has close to $2 billion in cash to put toward acquisitions, like the CenterRun purchase. It is unclear, if Sun will make other purchases, and while its stock is in a prolonged slump, the company’s cash position could allow it to make other similar deals.

The partners in the deal did not disclose financial details of the acquisition, but Dow Jones Newswires reported that sources claim it to be close to $66 million.

“Pursuant to the terms of the agreement, Sun will acquire CenterRun in an all cash transaction. The acquisition is expected to close in the first quarter of Sun’s 2004 fiscal year,” Sun said in a statement.

CenterRun has only been around for three years, and has carved a niche with providing major companies software for data center applications to be simply installed on a large number of computers across networks. Sun will be adding a feature to its N1 strategy that will extend greater flexibility to its customers.

“CenterRun provides software that enables customers to rapidly provision, track and update their networked application services across many network devices in an effort to minimize costs and maximize availability and business advantage. This acquisition further solidifies Sun’s N1 strategy. Combined with the N1 Provisioning Server, which performs infrastructure virtualization and provisioning, customers will be able to operate data centers in a highly efficient and highly flexible manner,” Sun said in a press release.

Back in November 2002, Sun began its N1 buying frenzy when it purchased Pirus and >Terraspring. Both companies contributed to aspects of N1’s infrastructure provisioning. With the acquisition of CenterRun and its application provisioning software, Sun says it is better positioned to providing tracking and networked distribution services to its customers.

While IBM Corp. and HP are bidding on similar service contracts to ASP’s, ISP’s and major corporations with massive data centers, Sun has quickly press forward with their strategy of networked distribution of applications.

There are questions whether Sun will insist on bundling its Solaris operating system with its network applications solutions, especially since most companies are running either versions of Microsoft Corp. or IBM’s UNIX operating environment variant AIX.

CenterRun’s CEO and co-founder Aaref Hilaly built the company with 35 employees, which received a total of $20 million in funding, which helped position the company for the Sun acquisition.

CenterRun’s software essentially automates the provisioning of software applications, so that changes can be made to any application on any server within a given network. The software sits in between a developer tool provider and a network application.

One of CenterRun’s competitors is Opsware , Marc Andreessen’s company, formerly known as Loudcloud, which specializes in software for automating data center applications and operations.

On Tuesday, Opsware said in September it would make available its Opsware System 4.0, code named Curie.

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