Oracle announces a $7.4B deal for SUN just a few weeks after the IBM
deal fell through. Oracle now controls a significant major open source
alternative and a nice piece of the high end computing business. These
open source components have been viewed as the alternative to the
dominance of the Big 4 or MISO (Microsoft, IBM, SAP, and Oracle).
Oracle also gains an innovation engine with the assets of Sun's Labs
groups which pioneers a series of innovations that include potential
enterprise solutions for the virtual world. The deal puts Oracle on a
continued path to acquiring deeper components of the enterprise
computing stack. Here's how the stack looks:
The value of Sun’s Solaris installed base proved its worth once again this week as Oracle found it too tempting to pass up and pulled the trigger trumping IBM. A large percent of Oracle’s most profitable customers run their Oracle wares on Solaris and for them to fall further into the hands of the mortal enemy alone justifies the purchase. Sure, Oracle gains complimentary IP in Java, MySQL, and a very competent services organization but most of the rest is likely to end up off Oracle’s books.
It’s not every day that we read about a software maker buying a hardware company and that in itself is perhaps the biggest sign of things to come from this acquisition. Oracle, like Microsoft, enjoys healthy profit margins from a software-only business model. While Oracle is far more consulting-heavy than its Redmond rival, it profits rise above IBM, HP, Cisco and others because of its low cost of goods. Sun’s server and storage businesses don’t fit with this model and certainly don’t justify the further investment in the SPARC microprocessor that will be needed to keep this business healthy. So despite Oracle’s statement that, “Oracle plans to engineer and deliver an integrated system -- applications to disk -- where all the pieces fit and work together, so customers do not have to do it themselves,” expect Oracle to shop these units tout suite. Dell and HP are likely to bid for these businesses and do a strategic alignment on product collaboration like HP’s last year on the Oracle Data Warehouse.
Last fall, Oracle CEO Larry Ellison announced that his company was getting into the hardware business, but I think he misspoke. At that time, he was referring to the new HP Oracle Database Machine with Exadata Storage, a high-end data warehousing (DW) appliance that incorporated hardware from his partner, as well as intelligent storage software technology from that partner--and even had the partner’s name first in the product name. If that was the criterion for “getting into the hardware business”--i.e., running on someone else’s hardware--then every software vendor on earth is in the hardware business, by my reckoning.
In my recent BI Belt Tightening For Tough Economic Times document I explored a few low-cost alternatives to traditional, mainstream, and typically relatively expensive Business Intelligence (BI) tools. While some of these alternatives indeed were a fraction of a cost of a characteristic large enterprise BI software license, there were even fewer truly zero cost options. But there were some. For example, you can:
Leverage and use no-cost bundled BI software already in-house.Small departments and workgroups may be able to leverage BI software that comes bundled at no additional cost with BI appliances, database management systems (DBMSes), and application licenses. You can consider using these few free licenses from Actuate, IBM Cognos, Information Builders, Jaspersoft, Microsoft, MicroStrategy, Panorama, Pentaho, and SAP Business Objects for additional functions such as testing, QA, and prototyping. While these few free licenses are just a drop in the bucket in a typical large enterprise BI license requirements, do look around and don’t waste money on BI products you may already have.
The Open Cloud Manifesto, backed by its thirty-six firms that signed on with its debut, outlines core value propositions, points out challenges, sets goals, and then lists several principles of what an open cloud should accomplish. Until now, there has been no real attempt to define or restrict the term or use of the term "cloud", but it’s hard to view this effort as highly credible when many of the early cloud leaders did not sign onto it. Most glaringly absent are Amazon, Google, Microsoft, and salesforce.com. Why aren’t all vendors signing onto this manifesto?
Well, one such reason given by Microsoft was their discomfort of being asked to sign the document "as is" without any chance for input.