Slow M&A process leaves Sun eclipsed

Solar EclipseWhen I first heard the news Oracle – Sun merger, I had high hopes that given a quick transition there would be some interesting disruptive effects.

This immediately threatens IBM who for years have used less expensive, home-grown hardware to propel sales in higher margin enterprise software. Oracle not only acquires the hardware to implement an end to end solution, but it acquires a very extensive software platform with the crown jewels being Java and MySQL, a technology that has propelled many companies looking to expand online. Oracle also acquires Solaris/OpenSolaris and thus fulfills its needs to own its own flavor UNIX based operating system which will no doubt further antagonize Microsoft and more importantly leave Oracle less dependent on the excessive churn in the myriad distros of Linux. — Justin McDowell — Jabian Internal Blog

While the DOJ has approved the merger the European Union recently launched an antitrust investigation that will grind the close of this merger to a slow walk. IBM, HP, and Dell have been using a serious ground and pound game to lure customer scared that their platform/server of choice will not be supported by Oracle, and for good reason. Oracle has been known to raise licensing rates after a successful acquisition – and kill products not in it’s core strategy. Developers have been forking projects and exiting the building in droves.

I still think all is not lost. Oracle will still have Java, MySQL, Solaris/OpenSolaris, and Xen. I think the question we should be asking ourselves is what else in the “stack” does Oracle need to acquire before it could theoretically run your data center top to bottom, and have a significant desktop software footprint (i.e. OpenOffice). IBM, HP, and Dell might be winning in the short term sales but none have made the strategic investments to be a single source provider.

A notsocommon prediction: Oracle still wins, but not by as large of a margin if it could have closed this merger in July.

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