April 09, 2009

What if Oracle bought Sun Microsystems?

If Oracle picks up where IBM left off, database, storage, and Java customers could be in for radical changes

So much for that. According to reports, Sun Microsystems has rejected IBM's buyout offer, apparently preferring to stick to the dogma that says Sun is still a vibrant, thriving company with a bright, independent future. At this juncture, I'd like to take a moment to offer the following public service announcement to any Sun employees in the audience: That's not Kool-Aid you're drinking.

More to the point, with IBM out of the picture, we're left with the uncomfortable prospect that some other suitor might step in to fill the vacuum. My pal Paul Venezia thinks Cisco might be interested in acquiring Sun, and one of the kookier rumors has Dell as a possibility.

[ For the full scoop on the IBM-Sun negotiations, see InfoWorld's special report ]

Neither scenario seems likely. Both assume that Sun's server business is its most attractive asset, which I question. If you added all of Sun's server revenue to Dell's, it still wouldn't equal what Hewlett-Packard earns from server sales. And if Sun were to simply disappear, Dell would surely gain at least some of Sun's share of the server market anyway -- so what would be the point of a buyout? What's more, I doubt that either Cisco or Dell would know what to do with Sun's software business.

But Oracle would. In fact, Oracle might stand to gain even more from Sun's software assets than IBM would -- so much so that I rank Oracle as the top (perhaps the only) potential buyer left for Sun. The shame of it is that if such a deal were to go through, I suspect that in the long run, Oracle's gain would be our loss.

Is MySQL doomed?
First off, let's dispense with the notion that Oracle would acquire Sun with the goal of scuppering MySQL. That wouldn't be worth Oracle's time, let alone the money. Oracle's annual database sales are measured in billions; any sales lost to MySQL barely make a dent.

And that even assumes that Oracle is losing sales to MySQL, which it isn't, really. Anyone who understands databases knows that for the high-end, mission-critical applications that drive Oracle's highly lucrative sales -- government, finance, oil and gas, and so on -- MySQL isn't even a player.

Sun knows it, too. When Sun acquired MySQL AB for $1 billion last year, CEO Jonathan Schwartz said that while Sun "will scale MySQL to extraordinary heights," it would not try to compete with Oracle. It was MySQL's rapidly growing installed base of 11 million deployments that attracted Sun, not its technology.

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cmaurand 9-Apr-09 6:43am
MySQL is a bigger competitor to Oracle than you think. MySQL doesn't have as many features as Oracle, but then, most people don't need all of those features. MySQL tables can now be partitioned, MySQL can make use of table spaces. There are also ACID transactions and triggers. MySQL has been developing its own transactional engine in an effort to not use either BerkeleyDB or InnoDB which are both owned by Oracle. MySQL is eating everyone's lunch at the low end. Oracle can't even give their free version away. IBM can't give its free version of DB2 away and I have no interest in running the Microsoft's baby SQL server (completely un-administrable) server for anything, either. If Oracle bought Sun, MySQL would be dead about 30 seconds after the takeover was complete. Just my $0.02
tracyterpstra 9-Apr-09 7:00am
1 reply

What if Apple bought Sun? It seems that the overlap would be low, but the automatic entrance into the enterprise would be a no-brainer. Apple has lots of cash. Lots of innovation.

ctryon 9-Apr-09 6:18pm
Interesting thought... One of the real bug-a-boos mentioned if IBM were to buy Sun was the difference in cultures. I actually think that the cultures between Sun and Apple would be at least closer, though the Clash of Titans with the two CEO's would be.... interesting. I'm not sure what the two companies would get out of the deal though. The hardware businesses are very different, and the software is aimed at totally different client bases. Don't get me wrong -- I'd love to see it happen, but I don't know what would really drive the deal (other than the fact that both companies are struggling to find their niche in the universe.)
ctgman 9-Apr-09 9:19am
Oracle (the organization) is the root of all evil. Anyone aquired by them will be changed for the worse.
MAS 9-Apr-09 10:13am
1 reply
I have never understood what Scott McNealy is smoking, but someday he will realize that the Sun is setting. But, what if Microsoft bought Sun? Now, that would be interesting!
ctryon 9-Apr-09 6:20pm
Microsoft and Sun? Can you say, "Matter and Antimatter explosion"?
obonicus 9-Apr-09 9:05pm
1 reply
IBM doesn't have a brand of Linux? What exactly is Linux for zSeries, then? As for Oracle buying Sun for Java, that's ridiculous. Sun is essentially the only company in the world that can't seem to figure out how to make money off Java. Certainly Oracle doesn't need to buy Sun for that. And your comparison to other companies is off. BEA and Peoplesoft had actual enterprise-level, extremely popular applications. That's what made them valuable. What exactly is Sun bringing to the table here? ZFS? Which is open-sourced anyway? So why exactly would Oracle pay as much for Sun as it did for BEA or Peoplesoft (it would have to to beat IBM's offer)? 'When Oracle wants something it gets it' is 5th-grade, fanboy rhetoric.
Neil McAllister 16-Apr-09 2:49am
Linux for zSeries is Red Hat or Novell: http://www-03.ibm.com/systems/z/os/linux/support/dist.html
simile 10-Apr-09 12:01am
I think Oracle would consider MySql to be too dangerous for Oracle to acquire. And by the way, Oracle owns its own JVM, its called JRockit and has pretty good performance compared to the IBM and Sun offerings.
implicate_order 10-Apr-09 7:33am
1 reply
This article reminds me of the old western movies where the hero is left to die in the Desert sun while the buzzards are circling overhead. Most of the commentaries by the ahem! Industry "Experts" is indicative of a "Buzzard-like" attitude. Guys...guys..guys! Don't you see -- the only three companies that do any innovation in the IT field are Sun, Google and Apple. No one else has the cojones to do real R&D any more. If IBM bought Sun, they would simply dismember and destroy everything that Sun has built so far. If Oracle bought Sun, that is exactly what they would do to. The best thing for Sun and it's customers is an independent Sun. For the kind of innovation that is happening out of sun right now, it would be tragic to let these hyenas drag this majestic company down.
cmaurand 15-Apr-09 11:09am
1 reply
IBM has more innovations and spends more on R&D than anyone else. Lets not forget that IBM is about 3 times the size of Microsoft. I like the Apple/Sun idea, but there is some overlap with the xserve (overpriced though it may be) and sun's line of servers. As far as merging with IBM; I'm not sure that purple and blue mix that well.
Neil McAllister 16-Apr-09 2:50am
Actually, Microsoft spends more on R&D than IBM does. More on that in this week's column.
Raven 17-Apr-09 4:50am
I would welcomed if Oracle buy SUN. Cause SUN feature is safe in Oracle hand. Oracle has large market captured rather than SUN. Obviously oracle can do more work to enhanced java feature. Codventure
cfuller 20-Apr-09 5:28am
Neil - you seem to be prescient! What was the date on that post again? Good call seeing this coming but I can't help but wonder at the impact this will have on the industry and the future of open source for the (former) Sun technologies. Anxious to see how this one plays out.
Saro 20-Apr-09 5:44am
1 reply
Neil - wow, good prediction - it would be fun to watch now how the market reacts to this
ssnkumar 20-Apr-09 11:12pm
That's a gr8 prediction. Now Oracle has offered to buy Sun for 9.5$ per share. And there is some time before the deal goes thru. In the meantime, some other company say IBM or HP may give a new offer. For IBM or HP, Oracle-Sun merger will throw up a mighty competition. And they may try to thwart that at any cost! Let's wait and watch.....

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