Oracle's announcement earlier this week of its intended acquisition of Sun ends months of speculation. Who would have expected Oracle to become a server and storage hardware vendor?
Of course there are some that wonder if Oracle will hold onto all that gear.
"There is speculation on what Oracle will do with Sun hardware: Keep them, sell them off, invest in them or let them fade away," said Greg Schulz, an analyst with StorageIO Group (Stillwater, Minn.). "I smell concern for Sun storage and server customers and opportunity in the near term for Dell, EMC, IBM, HP and NetApp."
Attempts to contact Sun proved fruitless. The company is effectively muzzled while the process unfolds. So what is going down?
Liam McGlynn, an analyst with Enterprise Management Associates (Boulder, Colo.), sees the immediate problem as being how Oracle will convince Sun server users of its commitment to that hardware platform.
"Under normal circumstances, this task would be daunting," he said. "In a time of slumping budgets, declining server market and a moribund Sun, Oracle needs more than a statement that it will continue with Sun's strategic plan. They need a burning bush, and they cannot spend much time striking the match."
One person, at least, is optimistic on the hardware side. John Webster, an analyst with Illuminata (Nashua, N.H.), heard the web conference and noted the statement that Oracle felt it could run Sun more profitably than Sun execs. Webster interprets that as meaning Oracle will continue to present Sun and its product line to the buying public, "lock, stock and disk array."
"It says, to me at least, that Oracle will depend on a goodly percentage of Sun's current workforce to continue to develop, sell, and support those products," said Webster. "Therefore this deal is probably way better for current Sun employees than the IBM alternative."
Not About the Hardware
But is hardware the motivation for the merger? McGlynn doesn't think so.
"Oracle is the big winner in this deal and hardware is not the reason," he said. "Oracle gains control of Java the core of its Fusion middleware."
EMA also sees Sun's xVM and virtual systems management capabilities as a huge asset to Oracle. Why? Oracle VM placed 10th in penetration in recent EMA research. The company needs all the help it can get to gain ground in the virtualization arena. Similarly, Sun's Ops Center potentially boosts Oracle's management capabilities across a wider set of hardware and systems.
Haff takes this argument a stage further. He sees Sun as a systems vendor, not a hardware vendor witness the degree to which Sun has ramped up its software business and its involvement in open source.
"Sun Solaris and Java were instrumental in Oracle's decision to acquire Sun," said Haff. "So this isn't really a software company buying a hardware one."
He puts this in the context of the system vendor landscape, which is reconstituting into big, highly integrated companies that can do it all. The purchase of Sun lets Oracle take this to the next level. It will be tightly integrating the Oracle database to high-end features of Solaris to deliver complete integrated computer systems applications-to-disk.
"With Oracle's applications portfolio, it's actually a more vertical integration than even IBM offers directly for the most part," said Haff. "If there was any doubt that the pendulum is in full swing back to large, integrated systems companies, this should erase it. We had IBM and HP (most recently with its EDS acquisition). Now we have Oracle. And Cisco is easing over that way."
Most analysts tend to be a little cynical or at the very least highly conservative beasts. So it is refreshing to be greeted with some genuine enthusiasm from that camp. Curtis Breville, another EMA analyst, has at various times been a Solaris administrator, an Oracle DBA and a StorageTek engineer. And he is stoked about all this.
"The acquisition makes perfect sense and has this analyst geeked out like few other corporate takeovers I've seen," said Breville. "This may very well put Oracle in the lead spot over Cisco in an effort to become supreme galactic overlord of the datacenter."
Initially, he says, the announcement will bring huge relief to the thousands of database administrators who struggle with the issues of marrying the appropriate technology with the performance and capacity demands of the database and applications they support. He envisions orderable solutions where database administrators or storage administrators can state the characteristics and demands they have for their front-end applications, place their order, and in return receive the appropriate hardware and software configuration equipped with the storage lifecycle management, protection and efficiency technologies via Sun/StorageTek equipment.
"If done right, the synergies to come from the merger of companies of such powerful technologies the leading enterprise database from Oracle with mature, proven, enterprise-class storage technology from Sun will solve problems spanning back 20 years and shine a promising ray of light on future data management solutions to come," said Breville.