Since having a quick chat with Matt about his view that Dell should buy Red Hat, I’ve been thinking about which vendors could make a play for key open source vendors such as Red Hat, Novell and Sun.
I wonder however, if it isn’t time that we open the aperture and consider suitors from growth geographies (I think that’s the P.C. term now?) such as India and China.
I don’t know much about IT companies in China other than Lenovo, but I trust that there are some large software vendors? Or has decades of software piracy put a damper on the domestic software market? But hey, if Dell can be a suitor, why not Lenovo? Lenovo is seeking to expand its enterprise footprint. Sun would be a great asset in that effort. The deal could open up additional routes to market for Sun’s hardware and software, especially open source, in Asia. In many ways, Sun + Lenovo could be a merger of equals.
Thinking about India, outsourcers such as Infosys, Wipro and TCS come to mind. These outsourcers have historically been software vendor agnostic with the services that they provide. However, as IBM can attest, there is no reason that a services vendor can’t also offer its own brand of software. The trick is to ensure that customers continue to view the outsourcer as software vendor agnostic. This is actually easier than it sounds. If the software division isn’t given preferential treatment during engagements, then the division is forced to ensure that their products are competitive. If Indian outsourcers don’t want to get into the hardware business, which is likely, at least to begin with, then Red Hat and Novell would make for better targets. The open source products that these vendors bring along could also align strongly with the cost value proposition that these Indian outsourcers rely on.
Maybe these deals won’t happen in 2009. But, it’s difficult to argue that companies from China & India won’t try to acquire western IT companies. We’ve seen that Indian and Chinese companies have made acquisitions in other industries.