The Integration of Sun and Oracle


For a company that was facing a financial brick wall, Sun Microsystems should count itself lucky to have had so many buyout options on such short notice.

You've probably heard that Oracle has offered to put up $7.4 billion for Sun, a deal that would value the company at about $5.6 billion and assume about $2.6 billion in debt. That's roughly where IBM's last offer was rumored to be earlier this month before talks fell apart.

Naturally, a deal of this magnitude has all sorts of implications, so I'm going to refer you to my ITBE colleague Dennis Byron for the big-picture overview and what it means for Oracle's future. For my money, nobody drills down into the essence of these kinds of events better than Dennis.

For my part, I thought I'd take a look at what some of the integration possibilities are between Sun and Oracle technology. Clearly, the biggest gain for Oracle will be control of both Solaris and Java that already provides a home for many of its database and middleware platforms. Tighter integration on this level has the very real possibility of putting Oracle back in the driver's seat in enterprise productivity.

Still murky, though, is what Oracle plans for the Sun hardware portfolio. Does the company plan on becoming a full-service enterprise supplier a la IBM and HP? Will it stick to its software-only model, perhaps looking to play a larger role as an open source provider?

According to Cnet's Stephen Shankland, the key to merging the two companies' technologies lies in a project called Raw Iron that has been on the back burner for close to a decade. The idea was to partner with hardware firms like Dell and IBM to devise a more application-centric platform in which hardware played only a supporting role as far as new features and innovations were concerned. Naturally, hardware providers haven't been too keen on the concept, but now that Oracle has hardware of its own it can really show what it has to offer.

Another key element in the deal is MySQL. It's no secret that Oracle has coveted that little piece of software for quite a while, so now we'll get to see whether the intent was to shore up the lower end of the database market, or to kill off a drain on Oracle's higher-end offerings. Enterprises that are heavily invested in MySQL had better hope for the former.

Right now, Larry Ellison is talking up the convergence angle pretty good, emphasizing the possibility of end-to-end platforms consisting of integrated Oracle hardware and software products. That may sound good on the surface, but is it really what the enterprise wants?

Apple offers branded hardware/software platforms too, but it's the mix-and-match style of IBM and HP that rules the market.