News Analysis

Sun/Oracle deal leaves customers in the dark

The delays caused by the EC's decision to probe Oracle's acquisition of Sun Microsystems could create problems for Sun's customers.

Organisations that rely on Sun, many of which are in the financial services sector, will not be able to start planning ahead until Oracle's $7.4bn acquisition is completed. Meanwhile, Oracle will be unable to publish its plans for Sun's software and hardware products.

But not all end-users, including many in the UK, are concerned, because they do not expect to make decisions on refreshing their technology until April next year.

Unfair advantage

The EC has until January next year to make a decision on whether or not the acquisition will give Oracle an unfair advantage. The deal has already been approved by US regulators.

It is concerned that the acquisition could be anti-competitive because Oracle databases and Sun's MySQL compete directly with each other in many parts of the market.

"Consolidation of suppliers is a concern where it reduces competition," says Ben Booth, global chief technology officer at research firm Ipsos.

No problem

But Ronan Miles, chairman of the UK Oracle User Group, says a significant number of companies' fiscal years run April to March. "This means investment plans that are going to rely on whatever plans Oracle publishes are not going to kick in before next year," he says.

Sun customers in the UK, including Nottingham Building Society, Leek United Building Society and Ipsos, will wait until April before making any decisions.

"At present this is not really causing us any issues, but we are watching closely to see how it plays out," says Peter Hanlon, chief architect at Auto Trader

Ronan Miles says that by singling out MySQL as cause for concern, the EC is saying it is happy with the rest, including Sun's key Java programming language.

"This is good news, and even if Oracle were to cut out MySQL, this should not have a big impact on users' plans as it will continue to develop as an open source project," he says.

Winners and losers

The biggest loser is likely to be Sun, which has already been hit by a global downturn in the server market.

Worldwide server revenues fell around 30% in the second quarter compared with the same period a year ago, according to research firms Gartner and IDC.

In the economic downturn, fewer businesses are investing heavily in the hardware and operating systems software on offer from Sun.

Competitors seeking to capitalise on the uncertainty caused by the Oracle acquisition will be further helped by the delays caused by the EC investigation.

At least one of Sun's UK customers in the public sector said it had been approached by Sun's competitors recently.

Just three months after Oracle announced plans to acquire Sun, competitor HP launched a server migration programme for Sun customers at lower cost.

Although end-users are unlikely to be severely affected by the delay, Sun competitors such as HP, IBM, Microsoft, Teradata and Sybase are likely to be the only winners, says Gartner analyst Andy Butler.


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