Sun’s new prospective owner Oracle explains why the IBM deal went sour. But will Oracle do hardware, and will it kill MySQL? Of course not, says Peter Judge
Oracle’s planned purchase of Sun Microsystems answers one easy question, and raises lots of hard ones.
Firstly, £5 billion from Oracle explains why Sun turned down £4.5 billion from IBM. When Sun rejected the IBM takeover, we wondered if there was a Plan B – and there clearly was. We may never know the details but it may emerge that the whole IBM proposal was a bargaining tool to get Oracle’s price up.
But the deal has sparked off plenty of discussion. Oracle has always been on everyone’s list of possible suitors for Sun, but now the deal is in the open, people are asking why.
What does a software company like Oracle want with a hardware-oriented company like Sun? And what does a proprietary software company like Oracle want with a company that’s basing its pitch on open source, and recently bought the open-source MySQL database?
The hardware question got some people rather over-excited: “The acquisition will redefine the competitive landscape, promoting Oracle to enterprise technology leadership,” says Technology Business Research. “Oracle is positioned to disrupt the hardware and software business by creating an integrated ‘data center appliance’ that combines hardware and software – Sun servers, storage and Solaris with Oracle database and middleware.”
I don’t think so. For ten years, Oracle has been floating the idea of a “Raw Iron” server appliance that relegates the question server hardware and puts Oracle’s software to the fore. It’s never really got anywhere, and owning an essentially-failed hardware business now won’t change that.
“It would be really hard on Oracle’s business model to become a hardware company,” Forrester analyst James Staten told eWEEK Europe. “You’ve got one company with no hardware experience, and one that is not very good at it. That’s not a very good equation.”
Staten believes Oracle will sell Sun’s hardware on to another vendor, possibly HP or Dell, or maybe EMC – and probably get a decent price for it. And I agree. Those other vendors would get value from it, if only by moving those customers onto their own hardware, and phasing out SPARC hardware on their own terms. And I don’t really see why Oracle would want to compete with the server vendors who are its partners – especially competing with such a poor hand as Sun would provide.
The other big question is what happens to MySQL? Again, some are speculating that Oracle might face antitrust issues, or might be simply attempting to rub out an open source competitor, but the answer will be less dramatic.
In fact, despite Sun’s big price for MySQL, the company hasn’t done much with it, and most of the major MySQL brains have already left the company. Owning the residual MySQL talent will give Oracle a chance to pitch Oracle as an upgrade to MySQL customers – “it could be a nice on-ramp,” says Staten.
But Oracle can’t kill MySQL, and we won’t see regulators objecting to the deal – fhte the same reason. MySQL is open source, and Oracle does not get own the intellectual property here. “There’s not a lot of reason if you are a MySQL customer to do business with Oracle,” says Staten.
Oracle’s speculated purchase of Red Hat makes a lot of sense, meanwhile – though it may have to wait while it digests Sun.
In the end the biggest win for Oracle is Sun’s customer base, many of whom are running the software on Sun Solaris servers. Oracle has been trying to move them on, using efforts like Unbreakable Linux, but Staten isn’t impressed. “Here’s a chance to ensure that move.”
Could this deal fall apart like the IBM one apparently did? I doubt it. It’s logical, and it’s actually been formally announced. I think it will be complete in double quick time.