Sun has found a home, with Oracle. My conjecture is that the Sun Board of Directors felt that an IBM/Sun merger was likely to face costly delays to gain regulatory approvals. Anti-Trust concerns that a merger of two of the world's largest hardware and services suppliers would reduce healthy competition would have made approval in the EU and the US problematic. Sun was losing value too fast to withstand a long regulatory battle. So the Board eschewed IBM as its sole suitor and encouraged the embrace of Oracle.
I don't believe that Oracle has ever sold hardware. So this is a merger of a hardware/engineering firm with strong engineering-style software and services with a business software firm. Both companies have cloud computing in common as the vector for their present and future strategies, so the Sun/Oracle cloud makes as much sense (maybe more?) than the IBM/Sun cloud. Many of Oracle's largest customers already run their server farms on Sun hardware with Solaris or Linux as the O/S and middleware layers and Oracle's database and applications at the software and applications layer.
Both Sun and Oracle have been aggressively moving into Cloud Computing. In fact, I remember hearing the most cogent "outsourcing" argument from one of Sun's top executives about four years ago. The picture he painted was seductive because he talked about something that most SaaS vendors don't discuss. He talked about using the patterns of customers' continuous improvements to inform the future development of Oracle's applications and middleware. If all of your Oracle applications are running in Oracle's cloud, and your firm customizes or adds capabilities to your own applications, that is your proprietary value-add, that is available just to you. But, Oracle, as the SaaS provider will "see" all of the improvements and work arounds made by all of its customers and will be able to detect patterns in these changes, and add those needed capabilities into the base application code. This was a good example of customer-led innovation. I was quite impressed.
There is one main incompatibility that I see between the Sun and Oracle cultures and brand. It's not so much a hardware culture vs. a software culture. It's a predatory sales culture vs. a respectful sales culture. Smart customers--software engineers and architects--LIKE dealing with Sun. Sun's sales people are highly technical. They speak the same language as their customers. They respect and admire their customers' talents. Oracle's customers are the CIOs and Aministrative Officers. They are used to being abused by Oracle's salespeople who are constantly extracting high rents and are hard negotiatiors. Many times, clients have told me how much they hate dealing with Oracle.
Will customers accept the combined brand experience? Time will tell.