Was Oracle's acquisition of Sun a success or failure?
It depends on your point of view, it seems. If you're a fan of open source, you've probably got complaints. But investers will find a lot to love about Oracle's integration after the Sun acquisition, argues Dana Blankenhorn in a recent Seeking Alpha post.
If you aren't familiar with Seeking Alpha, you should know it's a site for investers, and, more specifically, it seems to be more for the individual invester. At any rate, the site describes itself as differing from other finance sites "because it focuses on opinion and analysis rather than news, and is primarily written by investors who describe their personal approach to stock picking and portfolio management, rather than by journalists."
Nonetheless, Blankenhorn is a journalist - and not just a business journalist. He's a technology journalist whose previous gig was at ZDNet, covering open source and health IT.
But in writing this post, Blankenhorn is very much focused on the issues Seeking Alpha readers care about, which, again, is making money. And from that viewpoint, Blankenhorn argues, Oracle's acquisition of Sun is quite successful, especially when it comes to the open source assets:
The fact is, Oracle has succeeded in integrating Sun with its other operations, and has been able to use open source to penetrate new markets like insurance and health care, both highly profitable. Oracle has grown its net income in the last year while strengthening its balance sheet and continuing to buy smaller companies. Oracle has learned open source and found ways to profit from it. ... The press hasn't noticed any of this, but smart investors have, and they have profited from it.
In particular, he points out these open source moves by Oracle:
Now - here's where his background as a technology journalist becomes relevant. In the notes, a reader writes that these moves have not been good for the open source community, and challenges Blankenhorn to offer evidence that "Oracle has been a welcome steward of its open source applications." His response, I thought, is telling:
Welcome steward? No. You're right there. Able to squeeze the eagle until it screams? Yep. Which is what readers here care about. If I were still at ZDNet, I'd be screaming bloody murder about Larry Ellison and open source.
And, in case you missed it, many open source developers are screaming bloody murder about the deal after Oracle's recent release of Java Standard Edition 7, which is being described as a "buggy" release that "can crash virtual machines, corrupt data, and cause errors in applications," according to CNET.
Apparently, it hasn't been smooth sailing with VARs, either: A May article in the UK-based CRN reported on the mix reaction of VARs to Oracle's acquisition of Sun.
The Sun deal was huge for Oracle in more ways than one. As I wrote at the time, it signaled a significant shift in how Oracle marketed its solutions, particularly in terms of integration.
IT Business Edge's Rob Enderle warned back in 2010 that large mergers like the Oracle/Sun deal seldom fare well:
The mergers that seem to go the best are small ones close to a firm's core competence and between firms that are currently both being well run. The worst are large mergers in areas where the acquiring firm isn't currently competent and between firms where one or the other is in dire financial straits. The Sun-Oracle merger is the latter type. ... this merger probably will not be successful. It hasn't yet put Oracle at risk but the decade is still young.
It's still too early to decide if the deal was a success or not, but as we've seen to our chagrin in recent years, sometimes making money has nothing to do with long-term success.