Oracle Buys Ellison-Owned Pillar Data Systems

 
 
By Chris Preimesberger  |  Posted 2011-06-29
 
 
 

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 not disclosed.

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 financial position.

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.

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