Why do companies pursue mergers and acquisitions?
Sutphin: Primarily for growth. Some companies rely almost exclusively on acquisitions for growth and others not at all. Sun is somewhere in between. For decades, Sun has invested heavily in R&D and technology innovation — creating a broad and deep product portfolio that includes technologies such as Java, Solaris, and SPARC. Internal development is important, but it’s not enough. Acquisitions are one means of bringing to a company the innovation that, in the words of a Sun co-founder, “happens elsewhere.” But it’s important to emphasize that acquisitions complement Sun’s organic efforts, they are not a substitute for them. They are also a great way of adding new talent to the company. Q: How do you determine if a merger or acquisition is in line with your company strategy? Sutphin: At Sun we follow a corporate operating system — an ongoing, regular, planning cycle that produces the strategic plan by which we run the company. For the most part, our inorganic growth activities, including
