Tuesday, April 21, 2009

Vendors Survival: The Sun is Red - Oracle to buy SUN First Take

Today (April, 21) is the Holocaust Day. This post is in the memory of my cousins, aunts and uncles murdered by the Nazis in concentration camps before I was born.


In July 2008 I published a post in my Vendor Survival series. In the post titled Will SUN Microsystems Survive until 2018? I argued that Sun will not survive and named IBM, HP and EMC as companies which may think of Sun as target for acquisition. My opinion was supported by Sun discussing with IBM the possibility that IBM will acquire it. However, Sun attempts to being acquired by IBM failed.

Sun's board was divided to acquisition supporter (Jonathan Schwartz camp) and those who opposed the deal (Scott McNealy camp). Instead of being purchased by IBM for $7 billion USDs, Sun is going to be acquired by Oracle for approximately $7.4 billion.

I never thought of Oracle as a potential buyer of Sun or any other hardware vendor.I still think that Oracle's decision to buy Sun is probably wrong.

Oracle was always a software vendor and adding hardware to its products portfolio is a major business model change.


In addition, Oracle will face difficulties in continuing partnerships with server and storage vendors such as HP, Dell, EMC, NetApp and at the same time competing with them with Sun's servers and storage devices.

Assimilating all the acquired applications vendors (PeopleSoft, J.D Edwards, Siebel etc.) with Oracle is a big challenge, due to overlapping products lines, cultural and organizational issues and technological issues. Deciding which infrastructure products should be strategic: BEA's or Oracle is another issue. As far as SOA is concerned you can read my view and other views commented in the following posts: Oracle's BEA acquisition: SOA perspective, Oracle's BEA acquisition SOA perspective – Revisited, Oracle's BEA acquisition SOA perspective – Revisited again

All these yet unresolved challenges are augmented by the SUN acquisition.

Overlapping everywhere

Databases

Oracle is the leading database as far as market share is concerned. MySQL is in the forth place and is the Open Source DBMS market leader.

According to MySQL's publications prior to the acquisition of MySQL by Sun, its advantages over Oracle, DB2 and SQLServer where technical and not only price related advantages.

The two leading advantages cited where:

1. Availability - The company quoted an objective test showing that MySQL and Oracle where the most stable databases.

2. Simplicity - By omitting frequently unused features the company claimed a friendlier, easy to develop, easy to maintain and easy to manage database.

Killing MySQL is not an option, but Oracle database is the company's flagship product.


Expect for:

  • Less innovative MySQL
  • A Niche Player MySQL. Similar to the way Oracle positioned RDB many years ago.
  • Competition from other Open Source databases as well as from MariaDB (MySQL version developed by Michael "Monty" Widenius, the founder of MySQL and former MYSQL workers, who left Sun after MySQL acquisition).

Java

  • Oracle will own the JCP

. .

Expect for:

  • Two strong leaders in the Java community: Oracle and IBM
  • BEA's Weblogic as the strategic Application Server. Sun's Application Server will gradually fade.


SOA & Cloud Computing

  • Three Oracle's SOA suites: BEA, Oracle and Sun. I see no reason to change my predictions that BEA's solutions will dominate. The company started already to build a comprehensive Fusion Middleware solution including BEA's and Oracle's SOA products.


Expect for:

  • Few Sun's (formerly SeeBeyond) SOA infrastructure elements will be added to Oracle's future SOA suite.
  • Heterogeneous Java integration (Integration of multiple different JEE Application Servers) elements are candidates for inclusion in oracle's future SOA suite, because this is Sun's SOA solutions strength.
  • GlassFish ESB End Of Life or an Open Source Glassfish without Oracle support.
  • Sun's innovative Cloud Computing solutions will play a key roll in Oracle's Cloud Computing strategy


Operating Systems and Servers

  • RedHat Linux is currently Oracle's preferred Operating System. Now oracle owns Open Solaris UNIX operating System and should decide upon Operating Systems strategy: UNIX centered? Linux Centered? Or both.


Expect for:

  • Dual approach for the next few year
  • Linux domination for Long Term
  • New Linux variant including some Open Solaris capabilities
  • for Long Term: SPARC chip End Of Life and Intel/AMD based Oracle's Operating System


Open Source

The Open Source community may face challenges due to possible changes in Oracle's strategy in two components of the LAMP architecture: Linux and MySQL.

It should be remained seeing if Oracle will change its strategy towards less Open Source support.

Another Sun's Open Source project, Open Office could be ill positioned after the acquisition.

Whatever decision taken by Oracle, I think that the Open Source model will continue to be a leading model, especially during the current Recession.


Additional Notes

Sun's acquisition is part of the Market Consolidation trend described in a previous post: Vendor Survival Guide: Supermarket, Grocery and Kiosk.

  • Expect for a tougher competition between: Microsoft, IBM and Oracle. Google, HP and Cisco will continue to be market leaders.
  • The winner in the traditional Applications market from Sun's acquisition by Oracle could be SAP due to less vendor neutral Oracle and more resources allocation by Oracle towards merging efforts.


2 comments:

Danny said...

Good post Avi.
One comment on - "adding hardware to its products portfolio is a major business model change".
I dont think that Oracle bought SUN because of its hw offering, but despite of it...
The values that Oracle gains from this buy as the leading player in enterprise applications is evident from your blog. Being the owner of JCP and the only player in enterprise DB is a valuable asset

Anonymous said...

Sun's cloud strategy is tied deeply with its hardware, software, and OS. If Oracle were to sell off the hardware business to HP, it would have to partner closely to keep the cloud stuff alive. Killing Solaris would effectively kill the cloud initiative (Linux can't do the job right now; may in 4-5 years it will). WebLogic may be a good fit, but other Oracle software infrastructure pieces aren't. Oracle may be forced to keep a lot of Sun intact if it really wants to own a piece of the Cloud action.

About Me

My Photo
Jerusalem, Israel
אני מורה לברידג' (סיימתי קורס רשמי של ההתאגדות הישראלית לברידג'), המלמד ילדים, נערים ומבוגרים, בכל מסגרת בה אתבקש ללמד. משחק ברידג' במשך שמונה שנים בהנאה ובהצלחה יחסית. כותב מאמרים בירחון הישראלי לברידג'. סיימתי תואר שני בפסיכולוגיה ותאר ראשון בסטטיסטיקה באוניברסיטה העברית. מרצה בנושאי מחשוב ומערכות מידע בלימודי החוץ של הטכניון. בעבר הרצתי במספר רב של מכללות, כנסים וארגונים בנושאי מחשוב. עוסק גם בייעוץ בכלכלת המשפחה.
Share on Facebook

Labels