So, Oracle and Sun, eh?
But Oracle is no old fool falling for the charms of some bimbo. As far as this marriage is concerned, the company is thinking strictly with its head. Oracle plus Sun could really be an industry-changing match-up made in heaven, and the resulting company could be formidable. Well worth the $5.6 billion net price tag after Sun's cash and debt are taken into account.
Take a look at IBM. What you've got is a very large company that supplies IBM-branded hardware, application software, middleware, operating systems (both UNIX and Linux), database, storage systems and an army of consultants. The full monty.
And what could Oracle-plus Sun offer? Why, Oracle-branded hardware, application software, middleware, operating systems (both UNIX and Linux,) database(s), storage systems and an army of consultants. Sound familiar?
Oracle has had plenty of experience running its database on Sun hardware, and it plans to use Sun boxes as part of an integrated solution comprising the hardware, database, middleware, applications and so on. An Oracle appliance, if you like, or an "industry in a box," as Oracle co-president Charles Phillips puts it. What's interesting is that Oracle said it plans to focus hardware efforts "on our common enterprise customers, where we believe we bring competitive advantage, relationships, and a track record of helping to reduce costs and complexity." What exactly does that mean? It sounds like a limited market, and given that Oracle doesn't have a history in hardware you can't help wondering if Oracle is thinking of licensing, outsourcing or offloading the hardware-making in some way. Oracle has cozied up with HP and Dell lately: Could that be a way of keeping them sweet? Just a thought.
One of the big questions with a possible IBM acquisition of Sun was what would happen to Solaris? After all, IBM already had AIX and was keen on Linux, so why would it need another UNIX? When you look at it like that, an Oracle acquisition makes much more sense. After all, Oracle sells more database software licenses to run on Solaris than any other OS. And Oracle CEO Larry Ellison has plans: "We will be able to tightly integrate the Oracle database into some of the unique, high-end features of Solaris," he said during a conference call to announce the deal. The company will still offer a degree of OS choice with its rebranded Red Hat Linux, however. "Oracle is as committed as ever to Linux and other platforms and will continue to support and enhance our strong industry partnerships," is the official line. Given that the company seems to be copying the IBM model, it's a good bet that it won't renege on that commitment any time soon.
But Sun's declining hardware business and Solaris aren't the most interesting parts of this deal by a long shot, nosireebob! Oracle has a history of big software acquisitions (remember, $8.5 billion for BEA Systems, $10.3 billion for PeopleSoft and $5.8 billion for Siebel Systems) and now it's treating itself to Java, the code that Sun felt so important that it went as far as changing its Nasdaq stock ticker from SUNW to JAVA. The software, according to Larry Ellison, Oracle's CEO, is "the single most important software asset we have ever acquired ... " During the conference call he said:
Oracle's Fusion middleware our fastest-growing business is based entirely upon Sun's Java language and software. As a result of this acquisition, Oracle can increase the investment in Java technology that is so critical to our continued success in middleware, and our next generation of Fusion applications. We believe that Oracle's middleware business is on track to be as large as our multi-million dollar database business.
Wow! Unlike Sun then, Ellison believes Oracle can make a fortune out of Java. Put like that you could argue that the $5.6 billion Oracle is paying for Sun might be a reasonable price for Java alone, with everything else thrown in for nothing. It's only about half of what Oracle paid for PeopleSoft after all.
There's plenty of other stuff that Ellison and his gang will get their mitts on as part of the Sun deal, one of the most intriguing things being MySQL, the wildly popular open source database. Sun bought MySQL last year for $1 billion, following Oracle's purchase of Innobase, the company that provides the code for the InnoDB storage engine in MySQL. MySQL doesn't bat in the same ballpark as Oracle; it caters to the low end of the market and what we might call Internet businesses, so it could complement Oracle's database rather nicely. By offering MySQL to customers Oracle can cater to their needs from the smallest entry level database up to its hard-core enterprise offering. As far as Oracle is concerned, it would be a case of "All your databases are belong to us," in other words.
And don't forget that Ellison hates Microsoft. Bill Gates' company gets plenty dollar from its Office productivity suite, and guess what just fell into Larry's lap? StarOffice, Sun's Microsoft Office compatible suite derived from OpenOffice.org 3.0. What's the betting an Oracle branded StarOffice (Perhaps it could be called OrOffice?!) suddenly gets a whole bucket load of funding, just to cause a little mischief?
Paul Rubens is an IT consultant and journalist based in Marlow on Thames, England. He has been programming, tinkering and generally sitting in front of computer screens since his first encounter with a DEC PDP-11 in 1979.