Sun moves into storage business

Sun is looking to boost its data-management services with a $4.1bn acquisition of data-storage vendor StorageTek.

The deal, which will use up most of Sun's available cash reserves, gives the company a strong foothold in the data-storage market and also allows access to StorageTek's extensive channel network. The combined company will have a turnover of $13bn.

"It's an indication of where the industry is going," said Alastair Edwards, senior analyst at Canalys.

"If you're going to be in the hardware industry, you have to be in storage. Storage spending is growing by about two and a half times the spending on servers, so this buy makes sense."

He pointed out that Storagetek was a respected name in the data industry and while its growth had recently been low, it was in a good position to help Sun.

"This acquisition is part of an ongoing strategy to respond to customers seeking to rationalise their data centre purchases - to free up time and dollars to focus on compliance, architectural integration, security and, of course, the bottom line," said Scott McNealy, chairman and chief executive officer at Sun Microsystems.

He added that the acquisition would take Sun further along its path of becoming a company able to offer complete end-to-end solutions.