IBM‘s offer of $6.5 billion deal to buy Sun Microsystems was rejected recently. In comes Oracle for $7.4 billion, via The Register:
“The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,” said Oracle CEO Larry Ellison.
“Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.”
“We expect this acquisition to be accretive to Oracle’s earnings by at least 15 cents on a non-GAAP basis in the first full year after closing,” said Oracle President Safra Catz, in a statement today.
“We estimate that the acquired business will contribute over $1.5bn to Oracle’s non-GAAP operating profit in the first year, increasing to over $2bn in the second year,” Catz said.
Today’s announcement was sketchy, with little mention of what Oracle plans to do with Sun’s hardware business, and no reference to Sun’s MySQL’s open source database.
In a message to Sun staff today, Jonathan Schwartz said: “This is one of the toughest emails I’ve ever had to write. It’s also one of the most hopeful about Sun’s future in the industry.”
He said: “Oracle’s interest in Sun is very clear – they aspire to help customers simplify the development, deployment and operation of high value business systems, from applications all the way to datacenters. By acquiring Sun, Oracle will be well positioned to help customers solve the most complex technology problems related to running a business.”
He added: “A combined Oracle/Sun will be capable of cultivating one of the world’s most vibrant and far reaching developer communities, accelerating the convergence of storage, networking and computing, and delivering one of the world’s most powerful and complete portfolios of business and technical software.”
Ellison and McNealy were two of the prime movers behind the anti-Wintel coaliton which pushed the Network Computer. This was launched with much hoopla back in 1995. It’s nice to know they’ve finally got there.
I can only imagine the chatter in Santa Clara at the MySQL Conference & Expo.
The rationale is clear, via VentureBeat:
Oracle pointed to two key software assets that will give it an advantage in serving customers: Java and Solaris. It said Sun’s Java programming language and software will be the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracle’s fastest growing business, is built on Java, and Oracle can now continue to invest in Java technology for the benefit of its customers, it said. Java is used by million of businesses. It powers billions of mobile phones and consumer electronics.
The Sun Solaris operating system, meanwhile, is the leading platform for the Oracle database, Oracle’s largest business. With Solaris, Oracle taps into a high-end server platform that enjoys a reputation for quality.