Today’s business press is buzzing with a story first published by the Wall Street Journal, according to whom acquisition talks are said to be in progress between IBM and Sun. As someone who has worked for both corporations, for 12 and 8 years respectively, I read the stories with a certain wry amusement.
When I joined IBM in the mid 80s, it was suffering from the consequences of its own organic growth into a massive, unwieldy organisation with ossifying hierarchies and paralysing bureaucracy. If I remember correctly, when – as a new hire – I used my 3270 terminal to trace the reporting line from myself right up to John Akers at the top, I had to traverse something like 11 or 12 layers.
Six or so years later, it took radical surgery by Lou Gerstner (brought in from Nabisco, to almost shocked disbelief from many inside the behemoth… “a biscuit-maker…?!?”) to lop off the very disparate businesses which IBM had been trying to lump together under a single colossal umbrella (Lexmark, Lenovo and so on were some of the resulting off-shoots). (Incidentally, I was still at the bottom of the reporting chain, but now only about 9 levels from Mr Gerstner…).
When I arrived at Sun at the turn of the millennium, it was suffering from the consequences of extremely rapid growth, much of it through acquisition (especially in the software business) during the boom years of the late 90s. Where IBM had been struggling to function until it split itself up into separate, more manageable business units, Sun was struggling to make what had been self-sufficient businesses behave as coherent parts of a corporate whole.
One of the effects of that rapid growth was that Sun’s management layer became widely populated with people who, although perfectly professional, had only learned how to run a business during times of growth and profitability. When the tide started to go out, an awful lot of them simply didn’t have the skills to manage the same business under very different conditions. To a large extent, Sun is still suffering from the effects of a market which contracted faster than it was able to. (And before you ask… when I left Sun, yes, I was still at the bottom of my reporting chain, but I had chanced upon a very short one, and was only 4 layers from Mr Schwartz.. ;^)
So, if the rumours prove true and the alleged talks lead to an acquisition, the results are going to be culturally fascinating for both organisations. I shall, as the standard rejection letter puts it, “watch their future careers with interest”.