Oracle & Sun Micro, BFF; other tech giants are just Facebook friends now

Ellison

With the European Commission finally saying ja — oui — sí — yes earlier this month, Oracle closed the deal this week on its $7.4 billion acquisition of Sun Microsystems.

In one of the biggest transactions in the acquisitive company’s history, Oracle progressed from being a business applications software giant to a more fully integrated tech giant, one that also offers computer hardware, data storage peripherals, microprocessors, and tools for creating software. With that portfolio, professional and technical services will become a bigger part of Oracle’s business, as well. Services were about one-fifth of Oracle’s premerger revenues; for Sun Micro, various services represented more than 40% of sales.

Oracle held a big event at its headquarters in Redwood City, California, on Wednesday to go over its plans for integrating Sun into its operations. Some major points: Fewer than 2,000 people will lose their jobs in the wake of the merger, yet Oracle plans to hire more than 2,000 engineers and salespeople to beef up the Sun sales force. Sun largely relied on distributors, value-added resellers, and other “channel partners” to sell its computer workstations and other hardware. While Oracle won’t immediately cut off all those feet on the street pushing Sun hardware, it clearly is heading toward employing a larger direct sales force.

Sun’s Java programming language has obvious benefits for Oracle, which started as a database software developer and has grown over three decades to take in a variety of applications.

Larry Ellison, the billionaire founder/CEO of Oracle and the company’s largest shareholder, used Wednesday’s presentations to not only tout Oracle’s increased capabilities and opportunities, but also to engage in a mild rant about cloud computing (a term he dislikes) and to acknowledge that, yes, he would like to own the Golden State Warriors. (The NBA franchise plays across the San Francisco Bay in Oakland’s Oracle Arena.)

Scott McNealy, the outspoken chairman and co-founder of Sun Micro, bid Sun’s employees adieu in a heartfelt memo. Sun CEO Jonathan Schwartz made it clear in a diplomatic blog post that he won’t remain with the company to take orders from Ellison.

How Oracle now matches up with its traditional competitors and a new set of rivals is the big question in the aftermath of the merger’s conclusion. The company has a number of partnership agreements with other tech giants, in which they commit to helping each other out in selling complementary products and providing services to their mutual customers. Sun Micro had similar arrangements.

Oracle’s future relations with Cisco Systems, Dell, Fujitsu, Hewlett-Packard, IBM, Microsoft, NEC, and other tech giants will be fraught with competitive concerns that didn’t previously enter into the equation. Some of those companies are making common cause to fight Oracle and other competitors, such as the recent cooperative deals between HP and Microsoft and between Cisco and EMC/VMware.

Decades ago, the computer industry was fairly simple in the competitive playing field. There was IBM and the BUNCH companies. Now, as some people denote their relationship status on Facebook, it’s complicated. This decade will witness more dramatic change in the high-tech field and its biggest players.

~Photo courtesy of Oracle Corporation, used under a Creative Commons license.

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