I’m shocked. Oracle this morning announced plans to acquire Sun Microsystems for $7.4 billion. It’s not a traditional managed services story. But the deal reorganizes the software landscape for managed service providers and VARs. And it also raises questions about what Oracle will do with all of that Sun hardware.
This deal is about value (Oracle acquiring Sun at a low multiple) and software synergies. The Sun Solaris/Oracle combo has been favored by thousands of businesses for more than decade.
Of course, Solaris is a legacy name that’s being eclipsed by Linux and Windows Server in many markets. But Sun’s other software offerings — Java, MySQL and lots of middleware — fit nicely into the Oracle portfolio.
In some ways, the open source MySQL database was disrupting — but not destroying — Oracle’s traditional database business. By acquiring Sun, Oracle has a much higher chance of dominating the present and future database markets — whether customers want open source or closed source options.
There are also cloud computing and SaaS (software as a service) considerations. Cloud services (such as Amazon Web Services), co-location centers and Web hosting firms increasingly offer MySQL as a SaaS option in their environments.
Oracle: The New Hardware Giant
Still, I’ve got to wonder: What is Oracle going to do with all of that Sun hardware? Does Oracle really want to compete against IBM, Dell, Hewlett-Packard and Cisco Systems in the server and storage hardware businesses? That’s the wild card.
Apparently, yes. In the official press release, Oracle and Sun wax poetic about Sun’s SPARC and x64 systems. Personally, I wonder how successful Oracle will be in the hardware business. But I think Cisco’s moves into servers made Larry Ellison start to wonder “why not us, too?”
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Posted In: MSP Mergers and Acquisitions | Software as a Service and Hardware as a Service
Tags: Oracle Acquires Sun | Oracle Acquires Sun Microsystems | Oracle Buys Sun | Oracle MySQL | Oracle server hardware
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Just got off the phone with a New Jersey solutions provider. Our conversation was supposed to focus on IT security training. But we got sidetracked on the Oracle-Sun deal. The solutions provider predicted that Oracle would sell off Sun’s hardware business to the highest bidder. Interesting spin …
This is interesting. Would be interested to see how this will affect channel relationships all across Asia, Europe and the US. Specially for the database guys who have been chasing after Oracle, and the hardware guys who now have to contend/work with the enterprise software and infrastructure guys.
Jan: I have to admit … I underestimated Oracle when the company moved to acquire PeopleSoft. I never thought the deal would happen. And I never thought a completed deal would be successful. I was wrong on both accounts.
Fast forward to the present: Next to Cisco Systems, I think Oracle is right up there in terms of managing mergers. I still think Oracle will face extreme challenges in the hardware business, especially across the channel as you point out. But I’m done underestimating Ellison.
Update: Here’s a letter from Oracle President Charles Phillips to customers and channel partners, explaining Oracle’s acquisition of Sun.
Update 2: Here’s an FAQ from Oracle about the deal. Please note that the FAQ document is a PDF download.
Was this before or after Obama and the Feds announced they were pushing to tax all ecommerce on the Internet? I’m sure net-retailers will upgrade MySQL/Java solutions less as their profit margins decrease.
http://tinyurl.com/obamawebtax