Suns Software Revenues Likened to Mice Nuts

By Chris Preimesberger  |  Posted 2009-04-20 Print this article Print

"Phillips described Sun's software revenue streams as 'mice nuts,' quote unquote, compared to the rest of the Oracle product line," Rymer said. "Not interesting, not interesting at all."

Phillips was referencing Sun open-source software projects such as MySQL (database), GlassFish (Java application server), the Java identity authentication software franchise, the NetBeans software tools, and several others.

"Oracle, however, might decide to keep the identity software -- that's really good," Rymer said. "What'll happen is that these projects will revert back into the open-source world, they'll live or die there, and we'll see how good this stuff really is."

An interesting challenge here, Rymer noted, is that Oracle has done a lot of business with Hewlett-Packard over the years to create database machines. "Now they're going to compete with them," he said. "I don't think HP's going to be thrilled about this."

In the most general terms possible, Sun is, and always has been, a company of engineers first and sales people second. Oracle certainly has an excellent engineering division, but it also has one of the most aggressive sales forces known to man, led by the Big Kahuna salesman himself, Ellison.

Can Oracle Sell Sun's Wares?

Can Oracle sell Sun's products and services and make better profits?

"Oracle is very good at making money in open source," Enterprise Strategy Group storage analyst Brian Babineau told eWEEK. "Look at their deal to resell Red Hat [Linux] and make the money on maintenance and support."

That agreement, signed seven years ago, has been very profitable for both companies. So much so, in fact, that Oracle was rumored a month ago to be ready to acquire Red Hat -- the most financially successful open-source company in the world -- all for itself.

But when IBM dropped its offer for Sun two weeks ago, the wheels for this deal apparently started to turn in earnest at Oracle headquarters in Redwood City, Calif.

"I would expect a capitalistic approach to the MySQL business -- whether it is get rid of the R&D and just sell it, or move customers to Oracle DB," Babineau said.

"The bigger question is: Does Oracle stay a horizontal server and storage hardware company? All indications are that they were viewing these as expanding market opportunities."

Depending upon what Oracle decides, MySQL -- a popular open-source enterprise database that competes directly with Oracle's frontline product -- could become a minor player inside the merged company, or it could be set adrift.

Sun's stock price closed up about 37 percent at $9.15 on April 20. Oracle's was down 1.2 percnet at $18.82. Stay tuned on this one.

Editor's note: This story was updated to add financial detail.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel