Sun is buying Encore Computer's storage business for a reported $185 million (u116 million).
The company issued a statement last week, confirming it had signed a non-binding memorandum of understanding with Encore.
US-based Encore supplies technology that stores, retrieves and shares data for mixed platform processing environments.
John Shoemaker, vice president of Sun's enterprise server and storage group, said: " With the acquisition of Encore's storage business, Sun would gain an extremely talented group of employees with expertise in delivering solutions and support for the uninterrupted, transparent sharing of information across different platforms."
Separately last week, Sun slammed a report by US industry analyst David Coursey which predicted hard times ahead for the company.
In a newsletter, entitled coursey. com, Coursey said he found it interesting that at the "very moment Sun seems to have reached the zenith of its power, it has also become obvious that Microsoft has nothing to fear from them".
Coursey, a former editor of PC Letter, added: "The question isn't whether Sun can beat Microsoft, but whether it's the next Apple or Novell. Worse, Sun's own prodigy, Java, is sowing the very seeds of its parent's doom."
Martyn Lambert, director of marketing and technology at Sun UK, dismissed the report as "outrageous" and "nasty".
"This report flies in the face of other analysts, opinion, of where Sun is going. Their view is that Sun is increasingly big in the workstation and high-end server market. Also, we're not trying to beat Microsoft. That's a fallacy. We don't sell Office 97," he commented.
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