The agreement brings together two long time hardware/software partners. In a news conference, Oracle CEO Larry Ellison pointed to Sun’s Solaris operating system and Java programming language as instrumental to the deal. “Java is the foundation of Oracle’s Fusion middleware and the single most important software asset we have ever acquired.”
Sun’s largest business is its Spark Solaris computing systems business with the Solaris operating system at its heart. Ellison called it the best UNIX technology available in the market, but said Linux, IBM’s preferred programming language, remains the number two Oracle platform and will remain "extremely important" to the company.
Sun Chairman Scott McNealy pointed to 20 years of partnership with Oracle and said it’s appropriate that the businesses are coming together for the next phase of market growth. “It’s a truly momentous day for the industry, one in which two technology titans are joining forces to provide the market’s only complete integrated and open system in which customers can celebrate a new era of innovation and innovation in technology that drives their business forward.”
Forrester Research analyst Ray Wang favors the deal and says Oracle now controls a “significant major open source alternative” and “a nice piece of the high end computing business.”
Net of cash, the deal will be worth $5.6 billion, larger than Oracle’s acquisition of Hyperion and smaller than its deals for BEA or PeopleSoft. Oracle President Safra Katz said Oracle will be able to run Sun at “substantially higher margins” and that the deal will bring Oracle $1.5 billion in additional annual non-GAAP operating income and grow further from there.
Wang says Oracle is on a continued path to acquiring deeper components of the middleware, database and hardware stacks and has done better in its dealings than some have suggested. “Despite skepticism, Oracle has made these acquisitions work from a financial perspective with year over year quarterly profile growth that has generally been well above 20 percent.”
Jim Ericson is editorial director of Information Management, a SourceMedia publication. You can reach him at Jim.Ericson@sourcemedia.com. Follow him on Twitter at @jimericson.
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