Tuesday, April 21, 2009

A sampling of what others are saying about the Oracle-Sun deal


You've heard enough of my blabber, so let's see what others are saying.

Brian "Bex" Huff said a lot, but I'm just going to concentrate on one thing that he said:

Oracle now owns at least 5 portals, and at least 4 identity management solutions... unlike past acquisitions, existing Oracle product lines are going to have to justify themselves against free competitors.

Tom Grant also said a lot (heck, everyone's saying a lot; this is my fourth post on the topic), so I'll again concentrate on one item:

Remember when Oracle announced its intention to buy Peoplesoft, and everyone acted as though Viking longships would soon be coming through San Francisco Bay? Oracle has not cleaved savagely at the organizations it acquired, nor at the customers who came with them. Was everyone happy with the results? No, of course not--but how different was that from other acquisitions in this industry?

OK, I'll quote one more thing for the benefit of the Oracle AppsLab folks:

To its credit, Oracle realized that it needed to stop trying to build its own version of every technology out there. (Anyone remember Oracle PowerBrowser?)

Moving on, let's go to an observation from Ashlee Vance of the New York Times:

The drive to consolidate has made life difficult for independent companies like Sun, and the fall of such an industry stalwart highlights the mounting pressure on smaller firms in the computer, storage and software industries to find buyers. Even larger companies like EMC and Dell could be vulnerable, industry observers say.

Jeremiah Owyang links to Ray Wang:

Here’s how the stack looks:

* Middleware - While Java and Solaris may appear to be the crown jewels in the deal, Oracle has managed to slowly buy out other stack competitors (i.e. BEA and now Sun) and integrate them into the Fusion Middleware suite of tools for custom development and its own Fusion Applications product lines. Sun complements BEA.

* Database - Oracle takes out the low cost competitor to SQL server on the low end and gets a shot at converting them to Oracle DB instead of IBM.

* Hardware - Oracle gains another great recurring revenue (maintenance) base with Solaris. This complements Oracle’s large and profitable database installations on Solaris that would have fallen prey to the IBM DB2 team.

Meanwhile, Owyang has plenty to say himself, including his perspective on the Oracle community (see my prior post for Jeremiah's tweet on the topic):

Sun has a long history of being open, through their technology, executives that blog, and the thousands of employees that participate in one way or another in the social web. On the other hand, Oracle, which I observe to have a culture of top down management has been slower to embrace the social web. To their credit, in the last few years, they’ve hosted a Lunch 2.0, launched an innovation piece, a social network called Mix, and have a thriving community in OTN.

But then Owyang gets to the seven billion dollar question:

What happens next is what’s interesting. Will Oracle adopt some of the open Sun culture, will Larry start to participate in the direct conversations with the market? Will the Sun culture simply be wrapped under the red banners? Or will it end up like Peoplesoft, those that integrate well shuffle in line.

Rob Diana says a lot (don't we all?), so I'l highlight some of what he said about MySQL:

Oracle purchased an interesting business with MySQL. They can keep it open source, add on “premium” features that enterprise customers may want, and eventually push for upgrades to their enterprise offering of Oracle. In addition, they get some nice consulting and services deals out of this as well. If anything, this just makes Oracle’s database position much stronger. They have always had a problem getting smaller businesses to run on Oracle, and now they have something that almost anyone can run.

I'll end with Aaron Ricadela of BusinessWeek, who spoke about MySQL but concentrated on Java:

[T]he Java programming language, widely used to write much of the world's business software, is a key ingredient in Oracle's recipe for ensuring the many products it has already acquired work smoothly together. Java also runs on 800 million PCs and 2.1 billion mobile phones. PC makers and cell-phone vendors, including Nokia (NOK), pay royalties to license the software. "When you look at those numbers, they're enormous," Citigroup (C) analyst Brent Thill says of Java's potential. "Oracle looks at this and says, 'This could be a $1 billion business.'" Yet Java supplied just $220 million of Sun's $13.9 billion in 2008 revenue. "Java is the most valuable brand in software that has no value," says Joshua Greenbaum, principal of industry analysis firm Enterprise Applications Consulting.

So you have Java, from which you could potentially make more money, and you have MySQL, which provides a potential upgrade path which lets you make more money, and you have hardware, which could be bundled with your software to make more money.

This might work.
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