The tech headlines this week have certainly been eye-catching.

Cisco, which in this downturn is still making a 60 per cent gross profit margin and operating profits of more than 20 per cent of revenues, is risking upsetting long-time allies like HP to get into servers – a business in rapid retreat where profits have collapsed.

Now comes news that IBM is in advanced talks to buy Sun, reversing its steady march away from the hardware business into more consistent and profitable software and services. This amounts to a big change in course: after focussing on small software acquisitions, Big Blue looks like it’s about to become a consolidator in Unix servers.

What is going on here? Read more