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Voracious Oracle Gobbles Up Sun

Oracle's corporate org chart is starting to look like one of those maps of the Roman Empire or of Alexander the Great's conquests or something. It already covers great swaths of the technology industry, and it just keeps spreading in every direction.

Consider for a second this paragraph, courtesy of Bloomberg:

"Oracle is entering new markets as it seeks to reach $50 billion in revenue by 2012. The purchase is Oracle's third-largest after its $10.3 billion takeover of PeopleSoft Inc. in 2005 and the $8.5 billion purchase of BEA Systems Inc. last year. Oracle has spent almost $34.5 billion on purchases since 2005 to buy 52 companies, making it the most acquisitive software company in the world."

"The purchase" mentioned in that paragraph, of course, is Oracle's planned acquisition of Sun Microsystems, revealed yesterday. Oracle, once mostly a database vendor, is all over the enterprise technology map now, so to speak. Enterprise applications (ERP and CRM), business intelligence, storage, database technologies, severs -- you name it, and Oracle's probably trying to sell it to corporate customers, or will be soon enough.

Yes, the Sun purchase would make Oracle a hardware company by delivering to Larry Ellison's empire Sun's server lines, which are already home to lots of Oracle databases in enterprises worldwide. (Intriguingly, there is some speculation that Oracle didn't want the hardware business and won't keep it. The talk is that Oracle just wanted Sun's software business but had to take the hardware as part of the deal. For now, though, Oracle appears to be soaking in the entirety of Sun's operations, and Ellison is talking about keeping everything for himself.)

The acquisition announcement had jaws dropping all over the industry. Steve Ballmer said he was "very surprised" and needed to think about the whole thing, a rare moment in which the Microsoft CEO seems to have been caught off guard. Some analysts expressed shock, while others took an approach that might be described, if we want to be cliché (and we do), as "cautiously optimistic."

For Microsoft partners, it's hard to say exactly how an Oracle-Sun marriage will play out. HP and IBM will more likely be concerned by the massive shift in the competitive landscape at the outset of the deal than will Redmond.

But a stronger Oracle with a more diverse product offering (to say the least) could speed the spread of Linux-based servers in the enterprise, given that Oracle as a company is kind of a Linux fan and definitely not so much a fan of Microsoft. Of course, buying Sun would make Oracle a major factor in the Unix operating system game. Everything considered, an Oracle-Sun combo probably doesn't offer many positives for Microsoft partners, unless the two companies stumble over each other in the integration process.

Which, if history is any indicator, they probably won't. Ellison and his troops have been amazingly adept at swallowing companies and making them productive parts of the Oracle empire. Despite an economic downturn and loads of purchases in recent years, Oracle has just kept rolling along earnings-wise, beating the Street again with its latest quarterly report.

Oracle-Sun is another mega-deal that signals that the age of city-states is long over in the technology industry, and the age of empires has well set in. The thing about empires is that they usually end up collapsing under their own weight (right, Wall Street?). Thus far, Oracle has avoided that fate. It probably will with the Sun buyout, too. The question now is: Where will Larry Ellison go next?

What's your take on Oracle buying Sun? Will you do business with OraSun? Send a shout out to lpender@rcpmag.com.

Posted by Lee Pender on 04/21/2009 at 1:22 PM


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