Although FWIW, about $2B of that is just to cover the cash that Sun has in the bank, so they're really only paying around $5.5B for Sun's actual "stuff". With apologies to anyone blinded by my financial terminology
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Oracle to buy Sun for 7.5 billion
- Thread starter Full of Win
- Start date
- Sort by reaction score
And if Sun had lost money in 2008, it would be a negative multiplier!
Oracle is buying Sun's intellectual property, future revenues from existing contracts, and the expertise of its technical staff. Plus don't forget that Sun has a considerable amount of cash in the bank plus owns a good chunk of real estate and physical plant, all of which really reduce Oracle's investment in the deal.
Oracle GROSSLY OVERPAID....
Sun was not worth $7B in in it's prime it's definitely not worth anywhere near that much now. I doubt they'll be able to undercut too many people and considering Apple has a pretty significant head start it will be interesting to see if Oracle even attempts to expand the hardware market.
Sun was not worth $7B in in it's prime it's definitely not worth anywhere near that much now. I doubt they'll be able to undercut too many people and considering Apple has a pretty significant head start it will be interesting to see if Oracle even attempts to expand the hardware market.
Because that's what Oracle did when it bought PeopleSoft. When my company wanted to buy PeopleSoft's HRM software from Oracle, they told us that they were steered away from that suite. They got the impression that Oracle was slowly killing it.I don't understand why people feel that Oracle spent 7B!
Oracle appliances?
With Sun server, storage, OS and java, Oracle could release an appliance database platform. Plug in and go, and add disks as you grow.
Still almost all of Sun's software will get killed off (ouch for those who bought Sun's Identity Manager). Most of the hardware sales will dwindle away. MySQL and Virtualbox will probably return to community forks or fade away.
With Sun server, storage, OS and java, Oracle could release an appliance database platform. Plug in and go, and add disks as you grow.
Still almost all of Sun's software will get killed off (ouch for those who bought Sun's Identity Manager). Most of the hardware sales will dwindle away. MySQL and Virtualbox will probably return to community forks or fade away.
Fair point about the assets, but their profit margin is not impressive and Sun's share price consistently underperformed the S&P and the S&P Computer Hardware indices in each of the last 5 years. Few companies are going to a premium for any company in this market, so I don't find it surprising that Sun is not getting a great price given its historical performance.
Although FWIW, about $2B of that is just to cover the cash that Sun has in the bank, so they're really only paying around $5.5B for Sun's actual "stuff". With apologies to anyone blinded by my financial terminology
Oracle is also assuming the liabilities on Sun's balance sheet ($5.6B).
Ok, I'm confused here. I don't see anything on Oracle's site about Oracle 11g and OS X - are you talking about one of their other products? Can you post a link?
Oracle released Oracle 10g Release 2 for Mac OS X on Intel, a while ago. I've been watching to see if they would come out with 11g for OS X, but I'm not very optimistic. The last I heard was it was in the works, but that was around 2 years ago!
If anyone has any other info about this, I would love to hear it...
Actually, Apple would have a lot to gain from getting the Sparc engineers and patents that could be applied to their consumer division.
They'd also benefit their Mac offerings with tech from Sun's vast server engineering knowledge. Power management, disk subsystem design, and even manufacturing processes all might improve quality in Apple's product lines.
They did this before and failed. They started it again even before this announcement using HP hardware.
I can only see SMBs who would want this. Any DBA worth his/her salt isn't going to like a black box running the database. It simply doesn't work well over the various needs of applications.
IBM would have been more entangled at multiple levels, but the Application Server Market issue will likely just as difficult for Oracle as it would have been for IBM. Oracle AS + BEA + Sun JES/Commerical Glassfish is probably a bit over 50+% of the commercial java J2EE server market. Thrown in the fact that Oracle would now "own" Java (i.e., J2EE) and can you not see a potential monopoly problem?
When Sun owned Java and was only a very small player at being an app server vendor market, it didn't matter as much. Sun could somewhat regulate the major implementors but clearly wasn't making changes to block them.
It was going to be a potential problem with IBM too. (Websphere, being the largest share, + java ownership ) although with the Oracle + BEA share combination perhaps coming even or slightly ahead, not too sticky an issue. The stickier issues for IBM were very high end tape and mainframe storage. (the Sun StorageTek). A bit less so the Linux/Unix server market. (Linux, which essentially is "Unix", is growing fast enough that is one that wouldn't be as much of a blocker. )
Puzzled why folks think the DoJ danger would be MySQL. MySQL revenues are almost a footnote in the RDBMS market share numbers. That revenue isn't going to significant changes Oracle's revenue market share position at all.
No, you have it backwards.
IBM reportedly balked at some of the "take over" provisions written into a large number of Sun managements contracts. It is one of those pissy takeover things. Most companies don't mind paying off the uppermost execs to go. However, if have to pay off most of the employees their about to thrown under the bus... then that is a "problem". They want to trim money off the acquisition price even though that is a separate matter ( paying stockholders versus paying employees.)
Sun's problem with IBM was that they wanted guarantees (probably backed up with money) that IBM would push through the antitrust contest that the government might have thrown up. Likely in terms of some multimillion "jilted at the alter" clause built into the acquisition agreement. If Sun dated IBM exclusively for 6-10 months and then got jilted they wanted to get paid. That was very reasonable request (especially since there were other suitors around... even though IBM believed otherwise. It should be blatantly obvious at this point as to who was correct on that point. ).
For instance the government might has said that StorageTek had to be peeled out of the acquisition. At that point IBM might possibly throw up its hands and just walked away. I don't see the Sun stockholder benefit in that. Neither did some members of their board.
Oracle has less overlap with Sun so possibly fewer folks will be let go (at least in at the upper levels of the non overlap areas. For example, there are no managers for server development at Oracle. No chip design managers, etc. etc. ), so probably not as large a financial problem for Oracle as it would have been for IBM Plus it likely was to Oracle's advantage to move extremely fast ( so Cisco and/or IBM couldn't jump back into the game easily.) So more willing to eat whatever would get hit with (sales, HR, business backend services overlap) just for expediency sake.
Not like Safra Catz isn't likely to wield an axe though. She openly stated was going to adjust Sun's profitability . That's likely not solely going to happen by putting everyone on travel restrictions. However, if the acquisition price jumped 400-500 million because the bidding war started back up that would be penny wise and pound foolish to bicker about the exit costs on folks likely going to toss anyway.
IMHO, Oracle is likely to phase down some of the Sun parts of the business they pick up if can't fit their profitability. The other possible option would be to keep parts of the hardware business in a subsidiary. Or just report them as an "independent" business. That way folks would still see the profit margins were still the same for the software part of the business. Oracle is more than a one trick pony. The balance sheet is complicated just like HP, IBM, GE and other huge, diversified tech companies.
If Oracle-Sun kills off Sparc then it is unlikely there will be any buyers. With Fujitsu and Sun splitting duties on chip designs and sharing processors SPARC could still walk forward long term. But one vendor of limited sign can't keep a line going.
Fjuitsu already has a Itanium server solution. If the Tukwila Itanium coming out this year is decent then that is an even bigger no-go. (can share more common parts with the x86-64 line and should cut some costs and boost performance since not on shared front side bus anymore. ) Intel and HP are going to keep that one going. Fujitsu by themselves competing against those two doesn't make alot of sense. Teamed with Sun that was more reasonable.
I can see Oracle keeping the T1/T2/Niagra line stuff going. What would be much more cloudy is any follow ons to Rock/V9 line. That line is over a year late and may have been just too big of a revolution. However, scouting threads and databases are probably a very good match. So could work.
I think the comments about "Sun servers" are myopically aimed at the biggest Sparc servers. The smaller ones have no problems with Oracle's grid approach.
As for Solaris x86. The Unified storage products critically depend upon it. http://www.sun.com/storage/disk_systems/unified_storage/index_v3.html. Can't see how Solaris x86 couldn't be possibly tagged as anything other than strategic for the hardware business.
The catch 22 on Solaris-x86 is that customers haven't deployed enough of it. Partially that was, IMHO, because lots of folks were running around stating "isn't Sun dead yet" ( just like folks would say "isn't apple dead yet" in the 90's). If the Sun mindshare can get off of that "they are dead" vibe they'd have more legs. Oracle buying them gives them that. Which should seriously help. Not sure why Oracle would want to throw away that cash flow and revenue. That would be dubious.
The thing is about their x86 line is that it doesn't have to be running solaris. They support Solaris, red hat and even windows
. This is still a fairly new paradigm and I bet there are still a lot of people who don't know that. Where is the marketing? Where are the commercials? Our company was running all Sun for Unix and started to buy Dells for Linux. We are back to buying Sun for linux to keep everything standardized with our support contracts, vendors, etc. I don't see any reason why they would sell any of their hardware divisions. I do agree that their is a lot of politics involved though. People saying that "Sun is dead" when I feel they have the best line of products really does affect business. They really need to improve their marketing and that is something I would focus on if I were Oracle.You do know that HP owns EDS?? You don't think EDS doesn't run/install Oracle DB/Peoplesoft/Oracle Apps/etc. for folks for a fee? Likewise IBM Services does the same thing? What do you think Oracle's Consulting and Advanced Support do for folks?
Oracle isn't talking about adding value "on a hardware basis only". They are talking about being a "single point of contact" for some significant piece of someone's business IT operations. Either as a system integrator (it comes out of the box like an XServe but with a full application stack so perhaps more like an iPod. ) and/or as the box's operator.
So it is about becoming primary contact point for the rest of the pieces of in the puzzle.
It is doubtful that the very large servers and their non linear pricing were not profitable. IMHO, where Sun screwed up was in two points mainly to do with the smaller servers and machines. Plus a 3rd which probably was more about execution.
First, they didn't do a x86 line and/or hobbled Solaris-x86 for far too long. There was a period in early 90's when if Solaris-x86 had the price point it has right now and they had widely pushed it into the universities (at the "free" price point) that Linux wouldn't have gotten as hot as it did. Sun eyeballed SGI's expensive workstations and wanted that kind of markup too. That expensive workstation market evaporated. [ At least Sun had a x86 version. There was no other large Unix vendor that had a port. ]
Over the last 2 years Sun's x86 servers have had huge growth. In part because it is so small to start so not hard to do 100% when starting from scratch but they could have been in the game sooner. While HP and Dell are going to sell some Solaris-x86 boxes... they aren't going to push them as hard as Sun will.
Sun made the mistake of not doing x86 in part to protect the more profitable lines. Long term that is doom. That's like Apple not selling iMac so as to "protect" the margin on Mac Pros. Or not doing a iPod Shuffle to protect the iPod Classic.
Second mistake was related and that was doing "embedded"/"workstation" chips like the IIi/IIe/IIIi. So not only don't do an x86 workstation but come up with a chip that only would have to compete head-to-head with an x86 on price/performance. I know IBM has PowerPC and POWER split in the 90's but they had Apple on the PowerPC wave. In terms of units sold Sun wasn't going to do anything like Macs sold in terms of volume. And now forget it. Xbox and PS3 ... yeah right. Maybe better folks on the more server based SPARC cores would have let them get better stuff out the door quicker. Instead they were somewhat habitually late with all of their chips. A bit similar to the situation now where they have Niagra and Rock in development at the same time. Two slightly different approaches which costs alot to keep going in parallel.
The third thing was they paid alot for StorageTek. Even more (relatively speaking in terms of revenues/profits) for MySQL. Sun had money to whether the storms. They have burned through alot of it without huge payoffs. [ Nothing like the bang-for-buck they got out of buying Andy B's company and jumping into the top end game of midrange x86 servers. ]
Sun had $7 B and spent $4.1 on StorageTek. Similar issue, aiming more at big flush "mainframe" like accounts when the growth in storage is more rapidly growing at the smaller end of the pool. Now they have the unified storage systems and are leveraging flash in a leading edge way.
In short, seems like Sun often seem to try to get out of trouble by trying to head to markets where the profit margins were larger instead of dealing with trying to deliver something more effective where the competition was steeper. The "we'll just be slightly cheaper mainframes" approach. That doesn't work. Don't think Oracle is going to buy into that trap, but we'll see.
To tie back in with Apple. That whole "we'll just go to higher margins", no matter where the median price of computers are going, is a very similar trap. Similar effects too. Back in early 2000's Sun had tons of money in the bank; just like Apple has tons of money now. Long term though it was a bust to blow off the lower priced competitors over protracted period of time.
Apple already bought a chip design firm for $200-400 million already who have a proven track record in the embedded ( ARM , PowerPC) space. SPARC never did crack the embedded market significantly. While the T1/T2 are energy effective for server processors, they are still orders of magnitude bigger power draws then stuff that goes into iPhones and iPods.
Apple has this area covered.
Sun has outsourced most of its manufacturing. At least some of it isn't done in China. But they aren't too much different. The vast majority of Apple's computers have a single disk drive.
It might be cool if Oracle-Sun does "Applications in a box" smaller servers if Apple just let them do them and perhaps dropped out of the XServe market. They have already done that with Promise providing the storage solutions. Could get a single vendor for storage and server if had picked Sun to do it. Apple would just need a MacOSX Server port on a box they did. (a pragmatic blocker being nobody is doing EFI servers. )
For the consumer machines though... just don't see it.
For all intents and purposes, Apple is not a player in the server-business at all. Yes, I'm exaggerating, but not much.
I was taken by surprise when I read the announcement, but I am also happy it wasn't IBM.
It will be interesting to see what will happen to NetBeans, MySQL, and the other technologies, but at least MS will still be kept at bay.
It will be interesting to see what will happen to NetBeans, MySQL, and the other technologies, but at least MS will still be kept at bay.
If Oracle sits on MySQL development for too long, won't the open-source community simply fork it off and continue development (perhaps under a different name) anyway?
Shops like this come to mind:
Percona Labs
Shops like this come to mind:
Percona Labs
Oracle is like the Borg, the conquer and assimilate. They've done it with every database platform they've aquired. Look for MySql to support PL/Sql and the Oracle keywords and functions (It's pretty close already). Beyond that, it's a crapshoot. Maybe they may use it as their small to mid-sized database platform to compete with MS. I don't see them using it to undermine their Oracle Grid product. Oracle on Windows Server doesn't seem all that competitive.
Bad News? : Oracle Buys Sun MicroSystems & MySQL !
Does anyone here feel that Oracle buying Sun MicroSystems
and MySQL is going to be bad news for MySQL development
and the free market for Open Source Databases ?
Does anyone here feel that Oracle buying Sun MicroSystems
and MySQL is going to be bad news for MySQL development
and the free market for Open Source Databases ?
Um, yeah. With 5.0, MySQL was finally becoming a free, viable alternative to Oracle (at least for smaller organizations). Now, with them buying it, who knows if we'll ever see any real advancement in features in MySQL to keep it up to par with Oracle; my guess is they will stick to fixing bugs and that's about it. This very well could be the death of MySQL.
