Scott and Larry agree: It's all about IBM, stupid

Sun and Oracle's dissing each other (really Oracle walking from Solaris/Sparc to Unbreakable Linux) the past few years has apparently run its course. All's forgiven was the message from Sun Microsystem's Chairman Scott McNealy to Oracle Chairman Larry Ellison today. Like he had a choice.
The quid pro quos have been worked out, the joined-at-the-hip effects of open Java joy are re-invigorated, and the mutual bogeymen of Microsoft and -- especially -- IBM are reared anew.
Aside from the love-restored rhetoric, the real story is that the years-long brutal disruption of Linux and low-cost x86 hardware to the total cost of the datacenter ownership equation has settled into some sort of equilibrium in the global marketplace. The lowest common denominator total cost of an IBM DB2 datacenter, a Microsoft SQL Server datacenter, and an Oracle 11i datacenter -- blades galore -- are in rough parity.
Problem was that Sun was a big huge roadblock to Oracle in getting there, and so had to be sacrificed on the alter on proprietary hardware so that Oracle could keep its database business competitive while it proceeded to build and buy its business applications offerings hedge on the future.
Meanwhile, Sun belatedly charted a course to vastly increase the productivity value (at moderate prices) of its high-end platforms while building and buying its way to an x86 low-cost but powerful platforms hedge against the future. This was awkward, painful, took too long, and as a result the jury remains out on the full cost to Sun and its ability to regain past glory and riches.
So even though it took Sun longer, and slashed the size of the company and market cap, it sort of followed Oracle's lead to a reckoning: You can't let the other guy beat you on price very much anymore. So now Oracle can come back to Sun.

Friends like Larry are hard to find.
Here's today's news (in descending order of importance) with smarty-pants, quick-draw analysis:

• New bundled stack packages with cut-throat pricing that combine the best of Sun's and Oracle's formidable product lines. We'll need more details to see how good this is, but there is a huge opportunity for one-stop shopping heaven for datacenter CIOs. Target: IBM and Microsoft. HP can't touch it.
  

• Oracle re-ups its Java license from Sun for 10 more years. It had to, but the price and concessions were the rub. We can guess all night about the quid pro quos, but the recent Oracle move on multi-core pricing sanity was no doubt a major bargaining chip (so to speak).

• Solaris 10 deemed as preferred 64-bit platform for Oracle databases. High performance Unix computing are us. Guess HP-UX and IBM Series-whatsit won't be on the Oracle price list after all. Ho-hum. You gotta give Sun credit, they won the Unix wars.

• Sun will consolidate all of its internal business applications to Oracle business apps. This will not make Sun friends at SAP, another key partner. This was obviously another chip in the Java license negotiations. Set to Oracle.
  

• And here's an odd one: Oracle will admit on stage (and did) that it knows what NetBeans is. That seems to be it. Even though Oracle's JDeveloper tools and Fusion middleware are in Eclipse, they want you to know that they know that Netbeans is there, and so now you know. A meager chip that Sun was able to extract from Oracle during the negotiations.

Bottom line: Oracle holds the advantage, does the best job on strategic planning and execution, and will make the best deals when deals need to be made. Sun now has great partnerships with Microsoft, Google, and Oracle, all of which mostly favor Microsoft, Google, and Oracle. SAP will further distance itself from Sun. Sun remains alive but its vigor so often goes as much or more to support the health of the other providers in the stack, with small change left for Sun. SUNW's day and after-hours movement today seems to support this.
And so the conundrum that is the Sun ontology continues: That Sun does such nice things for others with little thanks, gets dope-slapped first when things go south, and is called by thugs like me such nasty labels as "proprietary," "pseudo open source," "a hardware company," and "late."
Ah, well. And so it goes.