Tuesday, April 21, 2009

Deja vu: Oracle is in the headline again

This time it may be the biggest acquisition of all - Sun Microsystems.

Enless blogs, analysis opinions and speculations were written in the last few days about the motivation of Oracle to acquire Sun, and about the dillemas Oracle is to face now.

Although it's been more than a year since my previous post, a sharp look would reveal that the latest and hottest event is a natural continuation of the trend I talked about back then.

Putting $7.4 Billion at turbulent times like this is not, by all means, to be done just for the sake of opportunity. I'd say that this acquisition was carefully planned and examined in Oracle's HQ for at least a year back. Adding the on-and-off rumors and announcements about the merger talks between IBM and Sun, it makes more and more sense to perceive Oracle's activity during the last 2 years as becoming a large competition to IBM, making the enterprise IT market into a bi-polar competitive landscape, almost a duopole.

I tend to speculate, similar to others, that the value that Oracle intend to create from this deal is more in the software domain rather than in the hardware. I believe that Oracle would deepen its partnership with HP, maybe transfer some of the hardware competencies of (former) Sun to its partner, and eventually we'd see a merger between Oracle and HP, which would become a powerful enough competitor to challenge IBM in the area of real end to end enterprise solution.

The end-to-end solution would be different from what we have known so far. Until now, end to end solution referred, most of the time, to the application layer only. If the scenario depicted above is going to take place - the term 'end to end' would represent a situation in which all the hardware, software infrastructure and applications come from the same vendor.

For enterprise customers - there are good and bad implications for this situation, has it became true. The good is that there would be a price-war between IBM and Oracle/HP, which would, in its turn, translate to cost saving. The bad side of it is that it would mean the end for best-of-breed option, as there would be two Gorillas fiercely fighting each other, and all the rest would become too small to notice.

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