Sun and Oracle - I would have won my bet

Today Oracle announced that they will acquire Sun. That isn't a real surprise to me. When the potential acquisition of Sun by IBM has been discussed some weeks ago, I've been asked about my view on that. From my perspective that would have been mainly a market share deal. And when big market share deals are discussed, Larry Ellison isn't far away. Thus I've said at that point of time that Oracle might as well make a bid. The third company I had in mind was Cisco, but they have missed that opportunity (which would have improved their strategic positioning significantly).

Right now, Larry Ellison has made it again. And from his perspective, that makes sense. He acquires market share in the application infrastructure and IT infrastructure market, and he gains access to much more Java intellectual property. Despite some overlaps in the portfolio, Oracle benefits from that. They become the "Java company" and they have acquired several other interesting pieces of software. Regarding Solaris, the advantages aren't that obvious. But at least Oracle has an own operating system right now which might become interesting for appliances and for other new types of solutions. The other way round, Solaris might benefit from other Oracle offerings as part of larger packages or enterprise license agreements - and given that Oracle right now is a hardware vendor as well, they might provide interesting bundles to their customers.

It is noteworthy that Oracle doesn't talk much about the hardware business in the initial press release. But the sentence of "Oracle will be the only company that can engineer an integrated system - applications to disk - where all pieces fit together..." is an indicator of Oracle planning to keep the hardware business and not to sell it. And given the opportunities for selling larger projects, for the appliance market, and for future cloud offerings (based on own hardware), there is some potential in that combination.

Specifically for IAM and GRC, there are some overlaps. But there are also specific strengths in both portfolios, with for example the very fast Sun Directory Server - and with the installed base of Sun. Anyhow, customers will have to carefully analyze the combined roadmaps of both companies. There are overlaps and that might lead to scenarios where customers have to migrate at some point of time in the future.



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