After announcing earlier Wednesday that it closed its $7 billion acquisition of Sun Microsystems, Oracle followed up with a previously scheduled Webcast during which executives laid out the rationale for the acquisition and detailed plans for much of Sun's product portfolio.
When the acquisition was first announced, it seemed an odd match to many. Oracle was a software company, and Sun was widely thought of as a hardware company--though it was really more than that. But there was always another aspect to this, if you thought more broadly about where the computer industry was headed.
The big boys were all aligning through either acquisition or partnership into the sort of vertically integrated computer companies that were once familiar but were largely displaced by processor, operating system, server, storage, and networking specialists.
At the time of Oracle's announcement that it was acquiring Sun, we had already seen moves like Hewlett-Packard's purchase of EDS and the ramp-up of its ProCurve networking business. The subsequent months have only highlighted this trend, with the increasingly close partnership between Cisco Systems, EMC, and EMC's VMware subsidiary. And HP's acquisition of 3Com and partnership announcement with Microsoft. IBM never abandoned a considerable vertical bent.
With Sun and Oracle's announcement of a database appliance last fall, there could no longer be any doubt that delivering factory-integrated stacks from server to storage to software was a big part of this acquisition. The only surprise today was the strength of the all-Oracle stack message.
Oracle CEO Larry Ellison, among others, made it clear that the IBM of the 1960s was the company's integration model. There were a few references to selling "best-of-breed components" to customers who wanted to purchase that way. But promoting the benefits of buying a complete hardware and software stack designed to work together was one of the other overriding themes of the day. I'm not sure that I heard "heterogeneous"--one of the terms that computer companies like to use, even when they don't really mean it--uttered once during the five-hour broadcast.
The other big theme could be summed up as something along the lines of: Sun had great innovation but executed really poorly. For example, Oracle President Charles Phillips said "Sun had created a very complex supply chain" and that Oracle was going to "implement a more attractive systems support plan. Some [support was] done by Sun, some by others, some by no one." Ellison was, if anything, more blunt: "We just need to do a better job of taking engineering output and delivering to customers."
There was much throughout the day on that theme, and it's hard to argue with the basic contention.… Read more