Oracle Joins the Hardware Big Leagues with Sun Buyout
NEWS ANALYSIS: The $7.4 billion buyout of Sun Microsystems is giving Oracle an opportunity to build an integrated hardware and software company that can compete with the likes of IBM and Hewlett-Packard as a full-service IT systems provider. But Oracle has to demonstrate that it is prepared to invest in the Sun brand for the long term, and not just wring as much profit as possible from a once great company that has long been in decline.Oracle's $7.4 billion acquisition offer of Sun Microsystems gives CEO Larry Ellison a chance to do something he probably has always wanted to do-build a vertically integrated hardware and software company along the lines of IBM and Hewlett-Packard. He built Oracle into one of the top software companies in the world. Oracle has consistently turned up as second or third on the published lists of the world's largest software companies, behind IBM or Microsoft depending on who is doing the counting. Ellison has never wanted to be anything but No. 1 in any market, which is why his company has shelled out more than $50 billion to date to acquire software companies that would add to its revenue stream and its technology portfolio.
The Sun buyout isn't even Oracle's biggest deal. That distinction goes to Oracle's acquisition of enterprise resource planning software provider PeopleSoft for $10.3 billion in December 2004. It's also eclipsed by middleware and application development tool company BEA Systems for $8.5 billion.