Global CIO: As Regulators Jam Oracle, IBM And HP Snatch Sun Customers
While Oracle sits in legal limbo, IBM and HP are blitzing Sun's customers in a prime example of the superb buyers' market that exists for CIOs today.
It wasn't supposed to be this way: Sun's hardware was supposed to let Larry Ellison and Oracle extend seamlessly and appealingly from the data center to the desktop. Sun's customers were supposed to feel safe and nurtured in the bosom of one of the world's most powerful technology companies. Oracle's new competitors like Hewlett-Packard and IBM, which itself had considered buying Sun, were supposed to be sent scrambling for alternative deals. And antitrust regulators were supposed to be mollified by Oracle's promises that it would play nice with competitors using Sun's Java and MySQL, allowing the deal to close by summer's end.
After all, you don't pay $7.4 billion for a head-case fixer-upper with commitment issues, do you??
But regulatory hangups are dragging out the completion of the deal at least until Sept. 3 and possibly until January, and until that completion is achieved, Sun has to operate as a fully independent company. That means that all the extensive plans for offering customers software-optimized hardware and the full shooting-match of products from applications to disks must remain on hold until European Union regulators decide on Sept. 3 whether to approve the merger or demand an additional four-month review.
But IBM and HP, however, face no such lockdown on their activities and both say they are feasting on apprehensive Sun customers as Oracle stews in legal limbo. As we noted last week, an IBM VP says Big Blue has racked up more than 250 customers wins involving Sun customers in the past six months, and during that same time HP says it has bagged more than 100 Sun customers for servers and storage products. Worse yet for Oracle, those haven't been random cutovers that happen all the time in the broad and often-cutthroat IT marketplace: They came about as the result of very specific and richly detailed migration plans that HP and IBM have launched to decimate Sun's customer base while the regulators keep Oracle on ice.
And while at least some Sun customers seem to be loving the results of the current impasse, the situation's not going to get better for Oracle anytime soon: Because regulators in the U.S. and particularly in the European Union might very well commit to nothing short of a comprehensive proctological examination of Oracle and its intentions (real or imagined) with Sun that could take until January to resolve, the highly motivated sales teams at HP and IBM and Dell and EMC have unleashed extremely aggressive recruitment campaigns that are so tantalizing and wide-ranging that even college basketball coaches could learn a thing or two from them.
The regulatory issues, which are a part of many same-industry acquisitions, have become particularly pressing in the case of Oracle/Sun due to regulators' concerns over Oracle's plans for Sun's widely used Java programming language and related technologies; a particularly nettlesome point for the regulators is whether Sun will seek to limit Java's availability to competitors. And with each passing week and possibly each passing month that regulators on both sides of the Atlantic ponder and speculate and probe and parry and go on holiday and consult fortune-tellers, the Sun customer base for which Oracle is willing to pay dearly will be hammered relentlessly by HP and IBM sales teams sent out with orders not to take "no" for an answer.
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