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When database giant Oracle announced in 2009 that it was buying struggling Sun Microsystems for $7.4 billion, the conventional wisdom was that then-CEO Larry Ellison was most interested in the Solaris operating system and that he would quickly shed the accompanying data center hardware business. But Ellison kept the SPARC-based server and storage systems, using them as the basis of engineered appliances that were tightly integrated with the vendor’s software.
However, since the deal closed in 2010, Oracle has struggled to make money from either the Unix OS or the SPARC-based systems. Seven years later, it appears the software maker, which has become increasingly focused on growing its cloud efforts, has decided to leave much of what it acquired from Sun behind. Oracle reportedly is cutting as many as 2,500 jobs, with the bulk of the cuts coming from the Solaris and SPARC divisions.
It’s unclear whether Oracle is ending its work on Solaris and SPARC, which officials have said they will support through 2034. But there has been a lot of chatter about the job cuts on online messaging board The Layoff, with most posters saying the bulk of those job cuts impacted the units dealing with the OS and RISC processor in not only California offices in Santa Clara and San Diego, but also in facilities in Burlington, Mass.; Austin, Texas; Bloomfield, Colo.; and India.
In addition, in a blog post this week, Brian Cantrill, a former Solaris developer and Sun executive, wrote that the layoffs at the Solaris unit are “a cut so deep as to be fatal: the core Solaris engineering organization lost on the order of 90% of its people, including essentially all management.”
This doesn’t come as a complete surprise. Oracle has seen declines in revenue from much of the technologies it inherited from Sun in recent quarters. In the most recent fiscal year, Oracle reported that hardware revenue had declined by 10 percent over the previous period, to $4.2 billion. In addition, Oracle in January announced it was cutting 1,800 jobs, much of those connected to the hardware business, and John Fowler, the longtime Sun hardware executive who came over to Oracle after the deal, resigned in early August.
With the Sun deal, Oracle had bought businesses that were under pressure from the rise of industry-standard and open technologies like x86 processors from Intel and Advanced Micro Devices and the various distributions of the Linux operating system. Sun executives in the years leading up to the sale to Oracle couldn’t reverse the trend, and neither could Oracle.
Top-Tier Vendors Adapting
Other top-tier vendors have also had to adapt, according to Charles King, principal analyst with Pund-IT. More than half of the mainframe MIPS that IBM sells now are based on Linux distributions, and the company now offers Linux-only mainframes and systems with a specialty processor for Linux-based workloads. In addition, Hewlett Packard Enterprise has turned to Linux as sales of its RISC-based HP-UX OS have declined, King said.
Vendors are finding that they no longer want to spend the money, time and resources developing to evolve and maintain their own operating systems and processor technologies if demand is going toward industry-standard products, King told eWEEK. Some are adapting. For example, the performance for some workloads is better on IBM’s mainframes and Power systems than on x86, and Big Blue has created a strong partner ecosystem through its OpenPower Foundation, highlighting other vendors that are eager to build products based on the Power architecture.
“Oracle doesn’t have anything even fractionally similar to that” for SPARC, the analyst said. “Since Oracle bought Sun, they have seen a steady decline in hardware revenues.”
It’s gotten to the point where, in the quarterly reports on the global data center server space, Oracle is now included in the “other section” of the vendor listings, behind such traditional rivals as HPE, Dell EMC, Lenovo and Cisco Systems, King said.
The news of the job cuts comes amid Oracle’s continued push to expand its cloud business as it competes with the likes of Salesforce.com and Amazon Web Services. The company in August announced it was hiring 5,000 people for its cloud software efforts, a fast-growing part of Oracle’s business that saw total cloud revenue increase 66 percent in the most recent quarter. During a June 21 conference call to discuss the quarterly financial numbers, Ellison and other Oracle executives touted the company’s strong software-as-a-service (SaaS) numbers and the growing platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) businesses.