Oracle’s game changing Sun deal gets US formal approval
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Oracle has now received approval from the US Justice Department to acquire Sun Microsystems.
The offer remains at $7.4 billion – meaning $5.6 billion including debt and cash – which analyst Gartner believes is a snip, given Sun's revenue stream of $13.4 billion.
Gartner analyst Andy Butler notes that the Oracle/Sun deal will mark the first time a leading software company has ever bought a leading hardware company, and will bring about a major change in the IT market "by giving Oracle the opportunity to become a powerhouse vendor in both software and hardware, potentially rivalling IBM and HP".
Oracle will take the opportunity to use the two companies' product sets to build "open and integrated systems", he says – which, he thinks, will range from business applications to middleware, database management systems, operating systems, servers and storage platforms.
"While this vision is appealing, it also presents significant technology and business challenges, including whether customers desire to source from a single vendor," says Butler. .
He also notes that the deal came at a critical time, "just as concerns have arisen regarding Sun's long-term viability and Sun customers have come under pressure to migrate from Sun servers and hardware".
Says Butler: "With Oracle, Sun customers will have more options available in multiple technology areas." And he cites: operating systems (such as Solaris on commodity servers, through which Oracle can promote Solaris or Linux); database management systems ("Oracle will likely not abandon MySQL support… Oracle now has additional hardware incentive to drive Oracle Real Application Clusters and applications on Sun x86 rack and blade solutions, and to minimise the influence of HP and IBM").
Butler also comments on enhancements in Oracle's position around middleware, servers, storage and, of course, Java.
"If you are planning a long-term migration away from Sun hardware, delay taking action until Oracle lays out its hardware road map," urges Butler. "Protect your hardware investment in new contracts with Sun by locking in five-to-seven year support agreements on SPARC hardware [and] proceed with caution on making new commitments to Sun middleware products until Oracle delivers a detailed roadmap for these products."
