There have been rumors about IBM purchasing SUN for a number of days now.
Where has SUN been competitive, where IBM would want to purchase them?
Since 2007, SUN has dominated performance of SPECWeb 2006 in 1 socket - it takes 4 socket systems to edge out a 1 socket SUN T2 processor - and of course, you just buy a 2, 3, or 4 socket T2 system to crush competing results, by an order of magnitude.
For most of 2008, SUN was at the top of the list for CINT2006 Rates in 1 socket
Since 2008 and so far into 2009, SUN is in the top 3 lists for in CINT2006 Rates in 2 sockets
Since 2008 and so far into 2009, SUN is the top CINT2006 Rates in 4 sockets, even pulling away from the quad hex-core Intel processors by 25%
For most of 2008, SUN was at the top of the list for CFP2006 Rates in 1 socket.
For all of 2008 and so far though 2009, SUN is at the top of the list for CFP2006 Rates in 2 socket.
Since end of 2008 and so far though 2009, SUN is at the top of the list for CFP2006 Rates in 4 sockets.
SPARC has been clearly very competitive FOR YEARS on a field where POWER had decided to not even compete.
SUN has been very competitive in the Applications Arena. OpenOffice is a SUN led OpenSource project, which IBM rebranded as Lotus Symphony, and SUN rebrands as StarOffice.
SUN has been very competitive in the Application Foundation arena. Most cross-platform enterprise applications are written in JAVA.
SUN has been very competitive in Tape Storage. SUN and IBM are basically the only games in town for substantial tape storage. The American Government would probably demand a spin-off of something in the case of a merger.
SUN has been very competitive in the OS arena. There is nothing in the market like Open Source Solaris, only Windows has a more complete CIFS Kernel API set than OpenSolaris for CIFS/SMB. Only OpenSolaris offers a very full featured file system like ZFS (other OS's like Apple are starting to port and adopt pieces into MacOSX.) Systems administrators being able to trace third party applications programaticaly using DTrace is unheard of in the industry.
SUN has been very competitive in the Ultra-Thin Client arena. With third party manufacturers making ultra-thin laptops, SUN making ultra-thin desktops, significant power consumption savings from these units (better than any competing platform), and demonstrated savings over thens of thousand of users (SUN's policy of Eat Your Own Dogfood as well as U.S. Department of Defense) places SUN in a very unique position to share Solaris, Windows, and Linux applications securely over WiFi, Ethernet, and Fiber with zero desktop management (unless you consider unplugging and throwing out your box and moving to a different station to pick up from where you left off a problem!)
Considering the size of SUN and the resources of the competition, SUN has done fairly well, even if they have not been able to compete everywhere as effectively as those companies with deeper pockets such as IBM.