Oracle and Hewlett-Packard are believed to have made a joint offer for Sun Microsystems in a deal totaling more than $2bn.
Under the deal, database giant Oracle would have taken Sun's software portfolio for $2bn, leaving HP with Sun's vast Solaris, Sparc, and x86 server products, manufacturing and distribution, and user base.
A potential deal between the three is understood to have been blocked by IBM, in the middle of talks to buy the whole of Sun for a reported $6.5bn.
Oracle, HP, and Sun declined to comment on what they called rumors, while IBM was unavailable for comment at the time of going to press.
A source, who didn't want to be identified, told The Reg that Oracle and HP had gone in to meet Sun to discuss the possible deal.
It's already been reported that Sun had been shopping itself around Silicon Valley, with HP named as a potential buyer.
This, though, is the first indication that HP had teamed with Larry Ellison's M&A beast Oracle - which has bought 50 companies in four years - to take only what they wanted from Sun. At $2bn, this would have been one of Oracle's large purchases, slotting behind PeopleSoft and BEA Systems.
Oracle and Sun parted ways on Java and on databases on Sparc a while back, partly thanks to Sun's $1bn purchase of the popular open-source database MySQL.
Of all Sun's software products, Oracle is likely to be most interested in owning this.
Despite what Sun thinks of itself as a software company, it has failed to build either a must-have software portfolio or a huge base of customers feeding Sun with license or services revenue around Java or open source.
The only bright spots are Solaris, Sun's directory and identity servers and MySQL. That's despite chief executive Jonathan Schwartz's rhetoric about making money from open-source in the cloud, which must be seen as an attempt to talk up the value of Sun's software assets and their potential.
MySQL would have had the most immediate interest for Oracle. Directory and identity are more complicated sells and Oracle has its own offerings. Oracle, meanwhile, has been distancing itself from anything to do with Sparc, as its systems relationship with Sun has cooled in recent years and the industry focus has shifted off Unix and Sparc and onto Linux and x86.
The database, though, has been growing relatively fast, although it has been tough converting free users into paying Sun customers.
Oracle, meanwhile, has failed to string together a decent open-source middleware strategy, from the time it let JBoss go to Red Hat to Oracle's predatory Red Hat support services that has fizzled.
An open-source database would give Oracle a big overnight presence among developers and in the OEM and web applications markets.
Oracle made a tentative play to undermine MySQL in 2006 when it purchased the InnoDB transactional storage engine. MySQL developers have since filled the InnoDB gap.
Had it been successful, a deal would likely have alarmed MySQL users and developers over the database's future, given Oracle's priority is paid, closed-source databases and the fact that it tried through InnoDB to kill MySQL.
That said, MySQL's future under Sun has also been looking uncertain. MySQL author Monty Widenius has left while former MySQL chief executive Marten Mickos will see his last day at Sun next Tuesday, following a farewell appearance at this week's Open Source Business Conference in San Francisco, California.
Other former MySQL executives are also believed to be looking for a way out of Sun. It is believed individuals in the MySQL management have been unhappy with the fact Sun's management has not been listening to their advice on strategy and direction. ®