It’s ironic but fitting that executive bonuses, a subject that’s ignited popular anger against the very companies in Sun Microsystems’ core customer base on Wall St, helped kill Sun’s future.

It’s been reported that a disagreement between IBM and Sun over post-acquisition packages for both chief executive officer Jonathan Schwartz and chairman and co-founder Scott McNealy helped sink a deal that sources last week told The Reg was imminent.

Did Sun’s total package kill the IBM deal? • The Register

Sun Microsystems share price has plummeted this week following the breakdown of IBM’s takeover talks. The board rejected an offer of $9.40 per share and terminated their agreement to negotiate exclusively with IBM.

Sun has been looking for a buyer for several months. The company has struggled for a few years and is in the process of cutting 6,000 jobs. Most analysts agree that it has never fully capitalized on its core technologies such as Java. During the mid-1990s, Java was touted as being the only development platform needed for desktop and web applications, but performance issues, licensing confusion, and the success of competing technologies contributed to its sedate uptake in the market.

Where Next for Sun Microsystems?

The big IBM-Sun (JAVA) news has come and gone; so far without an outcome. It’s going to be ugly for Sun. A situation like this is absolutely fatal to an organization. The wheels of employee defection and revised customer spending plans are set in motion and there is little that can be done to stop them. Sun’s senior management and the board probably have no idea how much has already happened in the last two weeks. So if they understand the urgency to find a solution for shareholders is an open question.

Right after the IBM-Sun deal fell through, speculation turned to Red Hat (RHT). The reason for this is that we are at a perfect time for open source companies and solutions. Budgets and spending are under huge pressure and all the growth seems to be at lower price points. The netbook craze is a good example of this. There are designs out there that promise formidable performance with HD video and high end graphics at “stupidly cheap prices”, according to eager customers. This has become a motif in many areas of technology adoption and growth.

Sun Still Stands Out on the Open Source Deal Horizon — Seeking Alpha

Open source software from Sun Microsystems Inc. (NASDAQ: JAVA) is enabling the United States Department of Health and Human Services (HHS) to build a secure, open technology platform to connect federal government agencies and health information exchanges in a “network of networks”–the Nationwide Health Information Network (NHIN)–built over the Internet.

According to Sun Microsystems, the goal of NHIN is to support the secure exchange of interoperable health information within the federal government and with the tribal, state, local and private sectors to enable increased efficiency, better patient care and improved population health.

The FINANCIAL – Sun Microsystems Helps U.S. Federal Government Build Interoperable NHIN

An acquisition of Sun Microsystems Inc. by IBM might have its good points, especially for Sun’s long-suffering shareholders. But IT users and analysts have concerns about the prospective deal that can be summed up in two words: uncertainty and fear.

While Sun is a diminished company these days, it remains influential, thanks largely to its open-source products and the massive development communities that have built up around them — Java and MySQL in particular.

Now, with IBM and Sun reportedly engaged in acquisition talks, there are questions about what IBM might do with those technologies.

Outcome of acquisition talks uncertain for IBM, Sun — and customers

via CrunchBase

Sun CEO Jonathan Schwartz has put forward a compelling argument as to how Sun will monetize open-source software.

Fortunately, he may never need to, as it seems all-but-certain that IBM will acquire Sun, perhaps as early as this week, according to sources familiar with the matter.

In a nutshell, Schwartz argues that chief information officers decide to pay for for value, and value is more than just software. Schwartz seems to be suggesting that open source makes a great complement to a larger systems business, and/or that for mission-critical tasks, CIOs will pay to ensure that a company stands behind the code.

IBM wouldn’t benefit from Sun’s open-source plan | The Open Road – CNET News

Vendors can build revenues from services and subscriptions, while CIOs, CEOs and the businesses they lead are freed from the “slavery” of traditional software procurement processes, said Sun’s Simon Phipps, speaking at a Sun developers conference in New York City.

In the midst of industry speculation that IBM might buy Sun for some $6.5 billion, Sun also used the event this week to announce the Sun Open Cloud Platform, a.k.a., “Sun Cloud,” along with the first two services from Sun to be based on the new private and public cloud environment.

Sun: Open source frees CIOs (and others) from ’slavery’ | IT Systems News – Betanews

The open source route has generated more money for Sun Microsystems than before, says its open source chief, and staying on this path will be central to the company’s growth strategy.

Sun made more money from Solaris today than it did four years ago after it moved the server platform to an open source model, said Simon Phipps, the company’s chief open source officer.

“OpenSolaris has been very profitable for us,” Phipps said, during a meeting with reporters at the Sun CommunityOne developer conference here Wednesday. The profits have come primarily from offering the platform on a subscription model, he said, which provides its customers a range of services including technical support, default resolution, code maintenance, warranty and legal indemnity.

Open source cuts across Sun’s growth strategy : News : Software – ZDNet Asia

IBM’s chances of being a major player in the era of cloud computing would be enhanced by a merger with Sun, says BusinessWeek.

IBM can also afford the $6.5BN acquisition that is apparently being discussed since it has $13BN cash hoard, notes BW Senior writer Steve Hamm.

In his report published today, the day after Sun announced its Sun Open Cloud Platform at an event in New York, Hamm writes that “IBM would be taking a risk by purchasing Sun…with no assurances that Sun’s cloud offerings will take off,” but he also stresses that a Sun acquisition “would give IBM a better entree into another segment of the nascent market: providing technology to the companies that operate cloud data centers for large consumer-oriented Web services such as Facebook and Google’s YouTube.”

IBM-Sun Pairing Would Help IBM Get into the Cloud: BusinessWeek | Open Source Magazine

via CrunchBase

It’s not clear if IBM is thinking about buying Sun. But one thing is clear: Sun execs are out selling it as the “largest” open source company in the world.

In a series of blogs written this week, Sun CEO Jonathan Schwartz claimed that Sun’s open source business — software and related services — is now worth more than $1 billion.

Schwartz: Sun is world’s largest open source company | Open Source | ZDNet.com