Oracle's Alternatives Dim Without Sun - InformationWeek
IoT
IoT
Software
News
4/20/2009
04:36 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%
RELATED EVENTS
[Cyberattacks] Using Data as Your First Line of Defense
Aug 10, 2017
Attend this webinar to learn how you can determine which threats pose the greatest danger to your ...Read More>>

Oracle's Alternatives Dim Without Sun

By becoming a systems vendor, Oracle will move from being a software company to one that packages solutions "from database to disk."

As a result of acquiring Sun Microsystems, Oracle will become an operating system and hardware vendor, two things it's expressed little interest in doing in the past. And in doing so, it will compete more directly with two powerful systems vendors that are frequently its partners, IBM and Hewlett-Packard.

But there's a reason this deal has come off when negotiations with IBM, which is a hardware and operating system vendor, led to a dead end.

As Silicon Valley neighbors, Sun's and Oracle's leadership have been allies and supporters of each other's interests for two decades. Oracle was an early Java supporter, perhaps second only to IBM, and sold many of its database systems to run under Sun's Solaris. Even when it announced several years ago that Linux was its target operating system, Oracle continued to sell the largest share of its databases under Solaris.

"In our opinion, Solaris is by far the best Unix operating system on the market," CEO Larry Ellison said at a teleconference announcing the deal this morning. More Oracle databases run under Solaris than Linux, which is the No. 2 operating system for Oracle "and still important to us," Ellison said.

"Sun and Oracle grew up together in the Silicon Valley. There was more synergy between them. Oracle is a better choice, culture wise, than IBM," said Gartner analyst Kenneth Chin.

And while they sometimes competed, they never fell into the class of competitors who could threaten fundamental interests, as Sun and IBM did in the period between 1998 and 2003. Sun refused to relinquish control of Java to an international standards group, as IBM had recommended after helping establish the language. IBM undercut Sun's effort to enter the Java tools business by releasing the Eclipse programmer's workbench. Their talks that began in March fell apart April 5.

By becoming a systems vendor, Oracle will move from being a software company to one that packages solutions "from database to disk," Ellison said, reminding teleconference listeners that Sun acquired Storage Technology in 2003 for $4.1 billion, and that business also will become part of Oracle. Oracle will pay $5.6 billion for all of Sun, after accounting for Sun's current cash and short-term investments.

Oracle will pay a price similar to the one Sun agreed to in negotiations with IBM, $9.50 a share, and Chin said Gartner "doesn't expect significant regulatory hurdles" to emerge with this deal. If IBM had bought Sun, it would have represented a heavy concentration of the commercial Unix market in one vendor's hands and faced Justice Department review.

Chin said he expects Oracle to evaluate Sun's server line and perhaps trim it back. But he said Oracle is oriented to selling large systems to corporate customers, and that means retaining the high-performance end of the UltraSparc server line. Oracle will have to invest in an UltraSparc design crew designing server chips that compete with Intel's and AMD's. Sun outsources the chip fabrication.

At the same time, Oracle has met success with its data warehouse machine engineered with HP on x86 hardware, and it's likely to explore growth avenues in x86 servers, Chin said.

Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
IT Strategies to Conquer the Cloud
Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll