If IBM had acquired Sun it could have led to a host of troubling government antitrust issues, but Oracle's $7.4 billion deal to acquire Sun is not likely to raise many antitrust concerns.
Unlike IBM's proposed bid to buy Sun
Oracle's April 20 acquisition of Sun is likely to raise few, if
any, antitrust concerns for the government. Since Oracle has far fewer
overlapping services with Sun than does IBM,
the $7.4 billion Oracle-Sun deal
should cause little stir
among government regulators.
"I don't think there are any regulatory concerns here," said
analyst Jack Gold of J. Gold and Associates.
The offer came weeks after a reported
deal between IBM and Sun Microsystems,
for $6.5 billion, collapsed. The deal
would have given IBM significant market share in the areas of enterprise server
hardware and software, as well helping IBM make major inroads into the data
storage, government systems and telecommunications markets.
In addition to IBM
having offered less
for Sun than Oracle
did, significant antitrust issues could have plagued the
deal and rumors persisted that IBM refused
to fully commit to the transaction because of those concerns.
Gold went so far in his analysis of the Oracle-Sun deal as to predict that Oracle
would eventually sell off Sun's hardware business and focus on its control of
"We believe that Oracle will not stay in the hardware business very
long. Indeed, we would expect Oracle to take the software assets (Java,
Solaris), perhaps keep some key hardware subsystems (networked storage-an
increasingly important market) and phase out or sell off the commodity hardware
business (perhaps to IBM or HP)," Gold
wrote in an advisory.
As for MySQL, Sun's database offering that does compete with Oracle, Gold
"It's gone," he said. "Maybe Oracle will just throw the
code out there. From Oracle's perspective, through acquisition of Sun it gets
to control Java and the ability to kill off an imminent threat to its database
hegemony in the MySQL open-source database."
Despite the lack of antitrust issues, Gold said the losers in the deal are
likely end users who can "expect higher prices for software and fewer choices.
Open source is an ugly word at Oracle."