I was just checking the Sun share price this morning and nearly had a heart-attack. I noticed the share price had jumped significantly in pre-market trading:

JAVA Jumps 50% in Pre-Market Trading

I glanced across to the sidebar in Google finance and it's awash with stories about IBM being in talks to buy Sun Microsystems. They all reference the same Wall Street Journal article - IBM in Talks to Buy Sun in Bid to Add to Web Heft. To say I'm surprised is an understatement of note.

On the one hand this could be a good thing for Sun - it's been struggling to be an innovative company and turn a profit at the same time. However on the other it won't be good for the IT market in the future. All the other "players" don't innovate to the degree Sun does. Think along the lines of ZFS, DTrace (and the products being built around these two innovations) and the UltraSPARC T1/2 processors.

There's also the matter of IBM being considerably bigger and more old-fashioned than Sun. For all we know, IBM could buy Sun to acquire it's innovation and patent portfolio and then dump everything else out with the trash. IBM +1, Competition -1.

It'll also be interesting to see if the regulators in the US allow such an acquisition to take place. As the WSJ article states:

The deal could face regulatory hurdles. IBM and Sun make many overlapping products, and the two of them have dominant market shares in servers that run the Unix operating system. The two companies also have overlapping products in areas that include software and tape storage systems.

President Barack Obama's choice to be the next anti-trust chief at the Department of Justice, Christine Varney, has said that she would take a different approach than the previous administration, which was widely viewed as more open to such mergers.

Of course there's the chance the whole thing falls through and never happens. Hey, maybe this is just the rumour mill doing it's work on the Sun share price ;-)