Oracle CEO and co-founder Larry Ellison's equity firm owns the majority stake in the 10-year-old storage company, which had been having financial issues for a few years.
Oracle just made about the easiest purchase of another company in
its 30-plus years in business, since it is buying a company its CEO and
co-founder already owns.
The Redwood City, Calif.-based database and IT infrastructure maker
revealed June 29 that it will acquire 10-year-old storage area network
provider Pillar Data Systems, in which Oracle CEO and co-founder Larry
Ellison's equity firm owns the majority stake. Terms of the deal were
This was merely a matter of filling out paperwork and having lawyers
bless the transaction. Ellison, since he is basically buying Pillar
from himself, isn't bothering with an up-front payment of any kind.
Oracle said it does not expect that the amount of the earn-out or its
potential impact to be influential to the company's results of operations or its
600 Customers in 10 Years
Pillar Data, based in San Jose, Calif., has about 600 customers spread
across 24 countries. It was founded in 2001, backed by a $150 million
investment by Ellison's equity company, Tako Ventures LLC. The company launched its first product, Pillar Axiom, in July 2005
The main idea behind Pillar's hardware and software product portfolio
is to provide highly scalable SAN Block I/O storage systems that can
unify and manage SAN (storage area network) and NAS (network attached
storage) environments together or separately on a single platform.
Analysts and product testers generally agreed over the years that
Pillar's arrays work very well and are cost-effective.
Although it was well known within the industry that Pillar Data
produced high-quality products, it also was known the company had
financial issues and had difficulty competing with more established
companies, such as NetApp, Hewlett-Packard, EMC and IBM.
Pillar Data, run by CEO Mike Workman, has about 300 employees. The
acquisition will give Oracle's installed base and potential new
customers a second-generation-type option to the Sun storage lineup it
acquired last year.
Shares of Oracle were up slightly at about $32.50 before the market opened.
Oracle President Mark Hurd and Executive Vice President of Systems John
Fowler are scheduled to provide an Oracle Storage storage strategy
update on June 30. The event will be webcast at 10 a.m. Pacific/1 p.m. Eastern time.