There are some curious ideas being bruited about in the computer industry these days. It seems that cash is burning a hole in the pockets of healthy companies such as IBM and Cisco. Rather than have the cash sit around earning basically nothing at today’s low interest rates, the companies have decided to start looking for acquisitions. While that can be a splendid strategy in the right circumstances, the combinations being discussed don’t make much sense. Shareholders would be better off if the companies followed Oracle’s example and declared a dividend.

The strangest idea is the suggestion by at least one securities analyst that Dell should buy Accenture. The rationale is that many big computer companies have large service operations, and Accenture could help Dell make inroads in corporate data centers. But come on. The Dell and Accenture businesses are so different that there would be no cost synergies. Revenue synergies would be minimal because Accenture would have to stay reasonably agnostic about the hardware its customers buy, or customers would go elsewhere in search of unbiased advice. So, the only way to justify the acquisition premium that Dell would have to pay is if Dell, with no experience in professional services, could run Accenture better than its current managers are. Not likely. For good measure, combining the two would create all sorts of complexity that the individual businesses don’t currently face.

Maybe the Accenture idea is just an analyst’s pipe dream, but the IBM negotiations to buy longtime rival Sun Microsystems are real [see 1, 2, 3], and that idea appears to be a classic mistake in a consolidating industry. IBM seems to be overestimating the savings that it can wring out of Sun, while underestimating the complexity of the deal.

IBM is assuming it can quickly knit the Sun line of servers together with IBM’s, but such transitions are notoriously difficult. While the idea looks straightforward on a PowerPoint slide, computers don’t exist on slides—they consist of incredibly complex, specialized hardware and layers of software containing millions of lines of code, and it takes years to bring disparate systems into harmony. In the meantime, competitors will launch savage attacks at Sun products, arguing that any customer even remotely unhappy with Sun should leave now rather than suffer through years of transition that will eventually turn Sun’s equipment into IBM-like machines. To see how this assault might play out, you can look at any number of disastrous consolidations in the high-tech world, such as the Burroughs purchase of Sperry to form Unisys in the 1980s, the Compaq acquisition of Digital Equipment in the 1990s or the Alcatel-Lucent merger in the 2000s.

Analysts say that IBM seems to be assuming that it can take $1 billion a year of cost out of Sun, because that’s what would have to happen for Sun to achieve the same level of profitability as IBM’s workstation business. Certainly, some cost can come out. Sun isn’t known as the leanest company around. Still, it has been whacking away at costs on its own ever since the dot-com bubble burst, and acquirers often talk themselves into seeing more savings than are really there. The Sun folks will still need offices, support staff, etc. It’s hard to see how IBM could find enough efficiencies to justify the 100% premium it is reporting considering paying, over the price of Sun’s stock before the negotiations were disclosed.

IBM may be feeling confident because it has made a series of mostly successful acquisitions in recent years, but those were far smaller than a Sun deal would be. In addition, Sun poses a much more complicated cultural challenge. Sun’s culture says that engineers rule, while, at IBM, the sales force dominates. That clash will take some sorting out. In addition, Sun has made a living for decades by mocking IBM, which won’t make things any easier.

Our research into failures suggests that, if IBM does buy Sun, the real beneficiary will be Hewlett-Packard, which will have a competitor disappear without having to spend $13 billion and without having to go through all the hassle associated with a major acquisition. Dell, which is hoping to build on its more modest success in data centers, might gain, as well—if it doesn’t buy Accenture.

Cisco is off on its own odd tangent. Its agreement to purchase Flip Video for $590 million purports to be a move into an adjacent market but really isn’t. While it’s true that traffic from the Flip cameras can be carried on Cisco networks as people send videos around, that doesn’t mean Cisco needs to own the camera business, any more than it needs to make its own mainframes, which also supply a lot of network traffic. In fact, mainframes have much more in common with Cisco’s core business than a consumer business like video cameras does. While Cisco has a stellar record with acquisitions, the Flip Video deal sounds rather like the Sony decision to buy Columbia Pictures for $3.4 billion in 1989, on the theory that Sony should have its own movies for customers to play on their Sony VCRs and TV sets. Sony soon took writedowns that equaled the value of its investment.

It’s not that we hate everything going on in the computer industry these days. Cisco, for instance, seems to be making a well-timed move into what really is an adjacent market, by introducing a line of servers. Cisco already has good connections with the buyers, who manage corporate data centers. The servers, which differ from competitors’ because of their networking capabilities, draw on Cisco’s technology strengths.

As we implied at the top, we also like Oracle’s decision to declare a dividend. While it’s been acquisitive, and generally successful, just because you’re sitting on a mound of cash doesn’t mean you should rush off and spend it.