Key to Oracle-Sun Deal: Storage, DB Hardware - Sun's Software Revenues Likened to 'Mice Nuts' (
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"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.
| | Reader Comments: Key to Oracle-Sun Deal: Storage, DB Hardware | | >>> Post your comment now!
| | Yes, but ...This is Chris P, writer of this story. Of course, the customer list is central to this deal. However, many of the high-end customers Sun has been... Posted At: 04-21-09 By: Chris Preimesberger | | | | | | Good pointsThis is Chris P, writer of this story. Excellent points, especially about Pillar Data Systems, 100 percent owned by Mr. Ellison. No question the... Posted At: 04-21-09 By: Chris Preimesberger | | | | | | The customer listThe customer list is what is at stake here, not the hardware. IBM wanted Sun for the same reason. Look for the hardware division to be sold off to HP... Posted At: 04-21-09 By: Anonymous | | | | | | Not really...Storage?...That would be Larry's Pillar Systems and HDS and whatever other Junk Sun couldn't sell to anyone in the last 10 years after launch after... Posted At: 04-21-09 By: dennisl59 | | | | | | >>> Post your comment now! | | | | | |
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