Sun and Oracle: What the Acquisition Means for SMBs

Oracle shocked the technology industry on Monday with its sudden acquisition of Sun Microsystems, valued at approximately $7.4 billion. Oracle moved quickly to snatch up the company after IBM and Sun failed to reach an agreement. IBM withdrew its offer worth approximately $7 billion earlier in April.

Due to the size of Sun and Oracle and the vast expanse of technologies, products and services they offer, companies ranging from the largest enterprises to small and medium-size businesses (SMBs) are to be affected. Although both companies’ main market is the enterprise, they have been beefing up their small business offerings.

In 2008, Sun launched an SMB-targeted initiative, offering open source virtualization, Web services, e-mail and database solutions. This January Oracle, which has a separate Web site for SMBs, announced partners around the world were to begin delivering Oracle Accelerate solutions aimed at midsize companies. In addition, Sun developed the programming language Java and owns MySQL, an open-source database; many SMBs run their companies, at least in part, on Sun systems.

Jim Locke, president of the SMB Technology Network, says while the acquisition is an overall positive development for the midmarket, few SMBs will feel any immediate effect, positive or negative. “I gotta be perfectly honest, I’m not sure it’s going to affect most SMBs at all,” he says. “I don’t think Oracle has made much impact in the midmarket, because of some of the price points.”

Locke says that while Sun, and particularly Java, has been broadly adopted by SMBs, Oracle has been the thousand-pound gorilla in the room. “If anything, Sun will open up some of that technology to the midmarket,” he says. “Sun seems to have a good ability to make some of these technologies available at lower nevel.”

Oracle, on the other hand, never really got its midmarket program off the ground, Locke says, because their products were still marketed at larger midsize companies. That being said, Locke says he thinks that if Sun can tap into Oracle’s software and extract SMB-focused solutions of enterprise quality, midmarket companies will more directly benefit from the deal. “It’s more beneficial to SMBs than when it was Oracle by itself, so all in all, I think it’s probably a good thing,” he says. “But we’ll have to wait and see.”

Like Locke, Info-Tech Research Group lead analyst Andy Woyzbun says the deal is full of potential opportunities. Woyzbun says the clients Sun already has probably were getting worried as to whether Sun would survive. From that perspective, the deal is good news. “Existing Sun clients are probably happy because they have an extended life for the products they bought,” he says. “The more interesting take is that this is really the opportunity for Oracle to innovate outside of the traditional space Oracle has invested.”

As SMBs increasingly look toward pre-packaged services to meet the demands of their business, companies like Oracle, combined with Sun, are poised to bite into a bigger share of the market. “Whether you talk about the cloud or managed services, SMBs are likely to buy a portfolio of products from a well known brand,” he says. “Sun with Oracle now represents a richer potential—but I don’t for a minute believe this was the result of years of intensive planning.”