Oracle's surprise acquisition of Sun for $7.4bn makes
strategic sense for both suppliers, but its implications for CIOs
are only slowly becoming clear.
Oracle snapped up Sun just two weeks after negotiations between
Sun and IBM collapsed.
The deal will catapult Oracle into the top league of IT
suppliers, allowing it to compete directly with rivals HP, IBM and
Microsoft.
It gives Oracle control of two strategic technologies - Sun's
Java programming language and the Solaris operating system, which
underpin much of Oracle's work.
"Oracle will be the only company that can engineer an integrated
system - applications to disc - where all the pieces fit and work
together so customers do not have to do it themselves," said Oracle
CEO Larry Ellison after the deal.
The sale makes sense for Sun, which has been struggling
financially since the dotcom crash. Its strategy of using software
to boost its hardware sales has foundered as servers increasingly
become a commodity item.
But many questions remain unanswered for users. How long will
Oracle support and develop Solaris? How will Oracle work with the
open source community to develop Sun's low-cost MySQL database?
What is Oracle's strategy for Sun's StorageTek business? Will
Oracle continue to support Sun's cutting-edge research?
The biggest question, however, is Oracle's move into hardware
manufacturing. Oracle could, like IBM, package up Sun's hardware
with Oracle software, to create all-in-one packages for businesses.
More likely, say analysts, it will sell off the hardware business
.
"I still believe that despite Larry Ellison's protestations, it
will sell the hardware business," says Richard Holway, analyst and
CEO of TechMarketView.