Zeichick’s Take: Tallying the winners and losers in the Oracle/Sun deal



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April 28, 2009 —  (Page 1 of 2)
It looks like Oracle is going to buy Sun Microsystems for US$5.6 billion (the net of Sun's cash cache). Maybe the deal won’t happen. Maybe IBM will swing in with a counter offer. At this point, though, the odds are good that Oracle’s going to end up owning Java and all the other Sun technologies.

Oracle is getting a lot of very nice intellectual property. Whether that IP—as well as Sun's product lines, maintenance agreements, licenses, consulting gigs and sales contracts—are worth $5.6 billion, that’s hard to say.

Overall, though, Oracle is clearly the biggest winner in this deal. It’s getting core technology that will cement its position in the application server market, and it also gives it obvious control over key industry specifications like the Java language, the enterprise Java EE platform, and the very important Java ME platform. Expect Oracle to exercise that control.

Let’s see who else wins and loses.

Loser: IBM. For years I’ve speculated that IBM would purchase Sun just to secure a tight control over Java, which is a core technology that IBM depends upon. Now that technology, as well as the Java Community Process, is going to fall into enemy hands. Bummer, Big Blue.

Winner: Java. Java is very important to Sun. Expect a lot of investment—in the areas that are important to Oracle.

Loser: The Java Community Process. Oracle is not known for openness. Oracle is not known for embracing competitors, or for collaborating with them to create markets. Instead, Oracle is known for playing hardball to dominate its markets.

Winner: Customers that pay for Sun's enterprise software. Oracle will take good care of them, though naturally there will be some product consolidation. Software customers may like being taken care of by a company that's focused on software, not hardware.

Loser: Customers that use open-source or community-supported versions of Sun's software. Oracle is not in the free software business, except when that free software supports its paid software business. Don't expect that to change.




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04/30/2009 12:51:55 PM EST

And what about Microsoft? Is a winner or a loser in this scenario?

Eldon Tyrell


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