Oracle reaches agreement to purchase Sun

Rumored acquisition talks between Sun and IBM may have petered out, but it certainly didn’t take long for Sun to find another buyer. The Silicon Valley company announced earlier this morning that Oracle has agreed to purchase it for $7.4 billion. Sun’s board has already given its nod of approval, and the transaction is on track to close this summer.

Oracle intends to pay about $9.50 in cash for each of Sun’s shares. According to the Associated Press, that’s slightly more than the $9.40 per share IBM offered. Sun also believed IBM’s offer gave it too much room to buckle under pressure from regulatory bodies—and that could have been a problem, since the deal would have united two of the world’s biggest server vendors.

Sun may not face that problem with Oracle, but why merge with it in the first place? The two companies make their motives pretty clear in the joint press release:

There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industry’s best-known brands and most widely deployed technologies, and it is the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracle’s fastest growing business, is built on top of Sun’s Java language and software. Oracle can now ensure continued innovation and investment in Java technology for the benefit of customers and the Java community.
The Sun Solaris operating system is the leading platform for the Oracle database, Oracle’s largest business, and has been for a long time. With the acquisition of Sun, Oracle can optimize the Oracle database for some of the unique, high-end features of Solaris. Oracle is as committed as ever to Linux and other open platforms and will continue to support and enhance our strong industry partnerships.

Oracle President Safra Catz also estimates that, in the year following the acquisition, Sun will contribute $1.5 billion to Oracle’s operating income. That will rise to $2 billion in the second year. Catz is talking about non-GAAP figures, though, so Oracle’s official bottom line might not grow quite that much.

Comments closed
    • eitje
    • 14 years ago

    q[

    • atryus28
    • 14 years ago

    You are actually wrong. Oracle is looking to be a one stop shop as much as possible. They also seem to have a great hatred to anything MicroSoft.

    They gobbled up my company about eight months ago. They have no problems with open source so long as legal is ok with the wording of the license. We used firebird for our single user install and just finished ripping it out for SQLlite.

    They also do not like .Net but it’s presence is too large to ignore. Our software uses .Net and probably is what saved 100% of our Dev team (myself included).

    They are actually quite interested in having an OS, Hardware and Software just from Oracle. It’s like Apple for the enterprise. Fusion Middleware is all the rage right now for them.

    Again they really want to be your one stop shop for things minus your desktop OS.

    • Anonymous Coward
    • 14 years ago

    Microsoft, IBM, Cisco, Oracle… the IT giants of our time.

    • Heiwashin
    • 14 years ago

    “According to the Associated Press, that’s slightly more than the $9.40 per share IBM offered.” I’m glad they’re smart enough to make that distinction. 😉

    • shiznit
    • 14 years ago

    matrix references are one of the reasons I love the Tech Report.

    • UberGerbil
    • 14 years ago

    Well, that’s why I put “without” in quotes. What they put in their marketing materials, and what’s really going on, doesn’t necessarily match up. That’s the nature of Oracle.

    Back in the early ’90s, Oracle got in trouble with the SEC because they were booking sales that hadn’t actually been made — customers would sign up to buy Oracle in some later quarter, or over a span of quarters, and Oracle would book all the revenue immediately. Ellison’s explanation when they had to restate their revenue: ‘We got our tenses confused.”

    • BenBasson
    • 14 years ago

    XE is restricted to a single core, 4GB of storage and there is a limit on RAM. I don’t think they’re even trying to compete with MySQL using XE.

    • ssidbroadcast
    • 14 years ago

    “You will see the Oracle now.”

    • eitje
    • 14 years ago

    can you point me to that bare-metal version?

    i knew they had a version for linux that would configure and install linux before installing the oracle DB, but i wasn’t aware they could be completely independent of the O/S now.

    • eitje
    • 14 years ago

    XE, I believe.

    • Flying Fox
    • 14 years ago

    I thought Oracle has a “personal edition” of their database? But may be MySQL is beating the crap out of that they figure they just buy the thing and call it “entry level”.

    • eitje
    • 14 years ago

    I’d argue that they’re interested in the services behind the software, not the software itself. But that would just be my opinion. 🙂

    • Flying Fox
    • 14 years ago

    Well, I guess they can now look closer in Solaris and see if they can use part of that in the “bare metal” implementation.

    • UberGerbil
    • 14 years ago

    Ok, that’s true. But I’m not sure the solution to /[

    • Hattig
    • 14 years ago

    I was talking about the API and language features, not implementations nor even the ecosystem (e.g., other languages that run on the JVM like Scala, Groovy, etc). Java 7 has been a slow one to date, and also doesn’t look to be adding anything majorly great.

    • UberGerbil
    • 14 years ago

    Sun owned hardware, OS, and DB and it didn’t help them.

    I do think the opportunity to make an integrated sale is part of the attraction here for Oracle, but I don’t think Solaris is a significant part of that. In fact that may be the least interesting part of Sun for them, and the one that Oracle leaves to the OSS community to support (or not). Oracle has always been OS-agnostic, and they already have “bare-metal” version of their DB that runs “without” an OS.

    • UberGerbil
    • 14 years ago

    It’s been tried. The results weren’t anything special. Considering how much effort goes into optimizing the speed of x86 chips, you’re really much better off just making your JIT compiler better able to produce good x86 code (as JRockit does, for example). And a fair bit of the overhead in Java is memory management (the GC) which really has nothing whatsoever to do with the instruction set and wouldn’t be improved by a dedicated Java chip.
    §[<http://en.wikipedia.org/wiki/MAJC<]§

    • UberGerbil
    • 14 years ago

    Mixing “Oracle” and “good intentions” in the same sentence is a recipe for humor. However, there is plenty of opportunity for Oracle to advance MySQL without destroying it, and as an OSS project there are ways for MySQL to continue without/in spite of Oracle.

    • StashTheVampede
    • 14 years ago

    What I’d LOVE to see is Java code on some flavor of an embedded chip to REALLY kick up it’s speed. Imagine (if you will) a rack server with two sockets — one has a Xeon/Opteron, the other is just a straight Java chip.

    (significant technical details here, yes).

    If you wanted something easier, just slap a Java card in a PCI-e slot.

    • UberGerbil
    • 14 years ago

    Oracle tried to buy MySQL multiple times in the past, before Sun got it. Unless you think they were willing to spend (reportedly) $850M just to kill it, I think you can assume that MySQL will continue under Oracle. At the very least, it offers them an opportunity to upsell existing MySQL customers as the successful ones start to outgrow MySQL. But it also gives Oracle control over what essentially amounts to the DB “API” for most “Ajax”/”Web 2.0” applications, which gives them an opportunity to make that upgrade more compelling in the future. It also puts them in the mix whenever any of their competitors make a server sale (since MySQL is likely a part of their competitors’ offerings too) and it gives them a place at the table when folks like Amazon are advancing “cloud” computing initiatives.

    Of course, all of that could take MySQL in directions some people don’t want it to go, and undoubtedly there will be people who want a version untainted by Oracle, so a fork is all but inevitable. The only question is how popular it gets.

    • UberGerbil
    • 14 years ago

    Actually Java development was progressing despite Sun, and outside of it — all the top Specjbb scores use IBM or JRockit (BEA, now also Oracle) Java, not Sun.

    • Hattig
    • 14 years ago

    This puts Oracle and Java into a single vendor stack that includes and OS, and even hardware to run it on. It probably will also give a kick to the on-going development of Java which was going at a snails pace under Sun’s leadership – and which has led to Microsoft’s .NET platform on SQL Server gaining a lot of ground. This puts Oracle on a better ground to offer a full ecosystem to clients, and in the long term is probably a must-do action.

    • derFunkenstein
    • 14 years ago

    Uh…no? Oracle needs to ensure that their fastest-growing business stays that way. If someone else buys Sun and ends up letting Java slide, Oracle is negatively impacted. They don’t just get money out of thin air; they need to be able to produce software to sell to make money.

    • clhensle
    • 14 years ago

    I really wish I did not sell my JAVA last week 🙁

    • swish
    • 14 years ago

    This could be bad news for MySQL indeed. Oracle is a very good Enterprise-level DB, and as long as MySQL does not take market share away from it, things may be okay. On the other hand, Oracle may try to sell MySQL as an “entry level” DB with support, and then allow customers to upgrade to Oracle when their needs become large enough.

    I’m just wildly speculating. It could also be that MySQL will remain as it is, the free “backbone” DB for small to medium tasks. It would be hard for Oracle to kill off MySQL since the source code is open. I just hope if Oracle tries to monetize MySQL in new ways that their intentions are good.

    • joselillo_25
    • 14 years ago

    Guys these are 100% financial operations, they are not thinking about technologies

    • StashTheVampede
    • 14 years ago

    Oracle now owns a heavy development platform for their DBs: Java
    Oracle now owns a major OS in the use of their low end and premiere DB: Solaris
    Oracle now owns a major hardware vendor for Solaris

    • VaultDweller
    • 14 years ago

    Wow. I didn’t see this coming.

    I wonder what this means for the future of MySQL? Oracle gets that along with Sun. I can’t really see Oracle continuing development of MySQL, so I’m thinking the open-source community will have to create a new fork and continue development under a new name.

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