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The suprise factor has to do with the functional fit between the organisations. IBM shared some common ground with Sun - it also manufactures hardware and is an enthusiastic supporter of open source software including the web-friendly Java programming language that Sun invented. But for Oracle, the deal brings it into the intense, low-margin hardware industry and gives it ownership of new software products, including Java and Sun's Solaris variant of the Unix operating system.
Oracle CEO Larry Ellison commented: “The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems... Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.”
Sun’s CEO, Jonathan Schwartz, added: “This is a fantastic day for Sun’s customers. From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system and Sun’s SPARC and x64 systems. Together with Oracle, we’ll drive the innovation pipeline to create compelling value to our customer base and the marketplace.”
The Oracle-Sun tie-up also brings together two monumental IT egos in Ellison and Sun chairman Scott McNealy. Brushing aside territorial concerns for the moment, McNealy commented: Oracle and Sun have been industry pioneers and close partners for more than 20 years. This combination is a natural evolution of our relationship and will be an industry-defining event.”
So intense was the reaction to the news that Oracle's corporate web servers (powered by its own databases and Sun Solaris machines) struggled to cope with the traffic for the first hour or so after the announcement.
In a conference call with analysts, Ellison explained that the Sun deal fitted into the strategy Oracle had pursued in the business software market, where it had picked up market leaders such as PeopleSoft, Hyperion and Siebel.
Aside from meeting Sun's demand for $9.50 a share, Oracle has no existing interests in hardware, making it less of a worry on anti-trust grounds. Subject to shareholder and regulatory approval, the deal is expected to conclude in around three months.
A brief history of Sun
Sun Microsoystems started life as a Stanford University spin-off (its name derives from the phrase "Stanford University Network") and became recognised as the Mercedes Benz of engineering workstations during the 80s and 90s. But the relentless success of Intel-powered Windows machines slowly ate away at the market shares and profit margins of workstation manufacturers.
Ever higher performance Intel chips and the arrival of the open source Linux version of Unix set the seal on Sun's future, but the company bought a few extra years of independent life by focusing on web servers and Java.
Eventually "the Java hype took over Sun", wrote Ian Kaplan in a perceptive history of Sun in 2003 that predicted its ultimate demise. However Kaplan did anticipate one potential survival plan that could yet emerge from the Oracle arragement, where the partners emulate Apple and devise solutions that are tied into Sun's hardwaren systems.
Oracle has sustained its growth through spectacular acquisitions in recent years, but has yet to prove its ability to deliver real technological integration (does anyone know where its "Project Fusion" business apps strategy has got to?). The Sun deal raises the stakes even further. It will be fascinating to see if Ellison and MacNealy can deliver the promised fruits of the union.-----------------------------
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Source：AccountingWEB.co.uk
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