News

Sun To Be Acquired by Oracle

In a move that will have significant ramifications on software development, open source and enterprise datacenters, Oracle today said it has agreed to acquire Sun Microsystems for $7.4 billion, or $5.6 billion net of cash and debt.

The deal caught observers off guard: Even after negotiations by IBM and Sun reportedly fell apart, many believed the two might come to terms. At the time, Oracle did not appear to be interested in making a bid.

Nonetheless, Oracle is a major stakeholder in Sun's key assets, Java and Solaris. Java is at the heart of Oracle's Fusion middleware, which the company says is its fastest growing business. By acquiring Sun, Oracle becomes a key steward of Java.

Oracle will also gain the popular open source MySQL database. How much Oracle will push MySQL moving forward remains to be seen. "I doubt they would use MySQL to drive profits out of their own space," said Forrester analyst Jeffrey Hammond in an e-mail. "I'd expect them to continue to support it, but position it as an on-ramp to their own databases instead of adding advanced features to it outright as Sun was doing."

Other questions remain, Hammond noted, including the impact on the two companies' Java tools, app server and middleware businesses.

Perhaps most unexpected is the fact that Oracle will become a major player in the hardware and Unix operating system business overnight. More Oracle databases run on the SPARC-based Solaris than any other platform, said Oracle CEO Larry Ellison on a call early this morning announcing the deal. Linux is the second-largest platform for Oracle databases, which Ellison said "remains extremely important to us."

The company was not believed to have an interest in going into the hardware business until now. Oracle indicated today that it intends to use Sun's hardware business to offer integrated systems that include its software portfolio, servers and storage.

"With the acquisition of Sun, we will be able to tightly integrate the Oracle database to some of the unique high-end features of Solaris," Ellison said. "Engineering the Oracle database and the Solaris operating system to work together enables us for the first time to deliver complete and integrated computer systems, database to disk, optimized for high-performance, improved reliability, enhanced security, easier management and a lower total cost of ownership."

Sun has a large storage business while Oracle has made its own moves into high-end storage with its Exadata offering which, through a partnership with Hewlett-Packard, offers a platform for data warehousing.

Oracle Co-President Charles Phillips said customers at its periodic meeting with large CIO customers last week welcomed the Exadata launch and encouraged the company to further its move into the datacenter. "They are asking us to step into a broader role by delivering a highly optimized stack from app to disk, based on standards," Phillips said.

Philips said Oracle will also target offering vertical industry appliances "with a complete industry in a box." Oracle will also be able to let ISVs deploy their applications on Solaris-based Oracle appliance, he added.

Oracle is estimating that Sun will add at least $1.5 billion in non-GAAP operating income in the first year "and growing from there," said Oracle Co-President Safra Catz.

Pending Sun shareholder approval, the deal is slated to close this summer.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

Featured

  • RAMBleed Side-Channel Attack Method Disclosed by Researchers

    Academic researchers this week published information about another side-channel attack method, called "RAMBleed," that can expose information from memory chips, including encryption key information.

  • Penguin

    Windows 10 Preview Build 18917 Shows Off New Linux Integration

    Microsoft's latest Windows 10 "fast-ring" preview release is showcasing a coming Delivery Optimization enhancement, along with the ability to try the newly emerged Windows Subsystem for Linux version 2.

  • Customizing Microsoft Office 365

    While the overall look and feel of Office 365 is pretty standard across organizations, there are several ways to personalize it and make it fit better with your company's specific needs.

  • Microsoft 365 Business Tenants Getting Conditional Access and Trouble-Ticket Features

    Microsoft added its conditional access security service to Microsoft 365 Business subscriptions, according to a Wednesday announcement, and it also added new trouble-ticket features for Microsoft 365 administrators.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.