Oracle Says It Will Keep Sun Hardware, Challenges IBM

In a full-page newspaper advertisement, Oracle officials say they will spend more money than Sun on developing and selling SPARC/Solaris hardware once they close the $7.4 billion deal for Sun. In the same ad, they also challenge IBM, which along with HP has been aggressively courting Sun customers who may have concerns about Oracle's bid.

Since first announcing their plans to buy Sun Microsystems for $7.4 billion, Oracle officials have been dogged by questions surrounding their plans for Sun's hardware business.

Though Oracle CEO Larry Ellison had said that he planned to keep that part of Sun's business, concerns remained. Rivals such as Hewlett-Packard and IBM have aggressively played up those concerns as they've tried to entice Sun customers over to their hardware platforms.

In a full-paged newspaper ad, Oracle officials reiterated their plans to keep Sun's hardware business, saying they planned to have more people selling and servicing Sun's SPARC/Solaris systems than Sun does now, and that they plan to spend more money developing both the SPARC platform and Solaris OS than Sun does.

The ad also says that the tighter integration with Oracle's software will improve the performance of Sun's hardware.

A quote in the ad from Ellison also chides IBM, with Ellison saying: "We're in it to win it. IBM, we're looking forward to competing with you in the hardware business."

Both IBM and HP have put programs in place to entice Sun users concerned about Oracle's planned takeover over to their platforms. For example, on the same day in July that Sun shareholders approved the Oracle deal, HP rolled out its Sun Complete Care program, a package of services, support plans and financial incentives aimed at enticing Sun customers to migrate to their x86-based ProLiant or Itanium-based Integrity systems.

According to HP, more than 100 Sun customers have made the move to HP since the program kicked off.

Oracle has its reasons for wanting to keep Sun customers, particularly given the large overlap of Sun hardware users who run Oracle software on the systems.

Sun, which has been struggling financially since the dot-com bust earlier this decade, has been hit hard since news of the Oracle buy became public in April, after months of Sun reportedly being courted by IBM.

Sun officials in July reported that the company lost $147 million in its fiscal fourth quarter, and both Gartner and IDC reported in August that Sun was the biggest loser of the top server OEMs in the second quarter. IDC said that in a difficult quarter for all server makers, Sun's revenue declined 37.2 percent over the same period last year, while Gartner said shipments dropped by 34.3 percent.

Oracle's wait to close the deal on Sun also was recently extended, when the European Commission-the antitrust arm of the European Union-said Sept. 3 that it was going to conduct a more in-depth investigation of the proposed acquisition. The decision was fueled in large part by concerns over the database market.

U.S. regulators already have given their OK to the deal.