Oracle working to win back lost Sun biz

It admits the acquisition was tough but says the company has done a better job in Asia-Pacific keeping its Sparc installed base due to the region's high ISV adoption.
Written by Eileen Yu, Senior Contributing Editor

SAN FRANCISCO--Oracle confesses its acquisiton of Sun Microsystems was plagued with challenges, but says it had spent the past year focused on driving demand back for its Sparc systems and done a better job doing so in the Asia-Pacific region.

Once just a software company, Oracle's market play changed when it acquired Sun in January 2010 for US$7.4 billion, adding a strong history of hardware offerings to its portfolio. The merger, however, had not been smooth.

When ZDNet Asia asked how the Sun buy had impacted its business in Asia, Adrian Jones, Oracle's senior vice president of hardware sales for Asia-Pacific and Japan, acknowledged the acquisition was tough but this was the case not just in the region, but in all three geographies including North America and Europe.

Speaking to Asian media here Wednesday at the OpenWorld conference, Jones explained that Oracle had come in as a very large software company which was about to enter the hardware business, so there were questions about what the company would do with it, how it should drive it and how it should transition.

"Unfortunately, no disrespect to Sun but they languished that business for many many years before Oracle actually acquired it," Jones revealed. "A lot of [the competition] like Hewlett-Packard and IBM were pushing against Sun and the installed base really reduced many years before Oracle acquired it."

Matt Boon, Gartner's managing vice president and group team manager of global data center research, also pointed to Sun's diminishing footprint, noting it was going through a challenging time and losing customers as well as staff before the acqisition.

"This was a spillover effect which I think Oracle obviously needs to keep on top of," he said. 

Boon said Oracle had been looking at how it could reaffirm its commitment to existing and former Sun customers, and added the latter had some very strong installed base within the Asia-Pacific region.

Noting that the company went through an "awful lot of change and turmoil" during the acqusition, the Gartner analyst said a lot of relationships Sun staff had with both partners and customers across the region "collapsed".

Regulatory issues also made things more difficult for Oracle in Asia-Pacific and it took more time to close its Sun acquisition, he said. In India, for instance, the merger was finalized just six moths ago, he noted.

"We've definiltely seen a decline in their [hardware and systems] business and that's been a real issue for them," he said.

ISVs helped Asia retain Sun customers
According to Jones, Oracle had spent the past 18 months transitioning its business. He said it was aware, particularly in the Asia-Pacific region, where Sun's customers were, what they were buying and what they were doing today.

"We had, over the last year, very much a focus on the installed base program to drive back demand for Sun Sparc servers particularly, and migrating them off older technology to new Sparc technology," he said.

He added the Asia-Pacific team has done better at driving and keeping its installed base customers than other regions, primarily because ISV (independent software vendor) adoption for Sparc and Solaris was widespread in Asia. This had helped keep a lot of these customers with Oracle.

Boon noted Oracle's commitment to hardware is now clear and the vendor has been trying to build up its partner market again in several key Asian markets. It is also working to reaffirm its support to existing customers as well as those that might have "left the fold", the Gartner analyst added.

It would take some time, however, before Oracle is able to get back to what it was a couple of years ago, he said.

Jones said: "I would say we went on a journey of transition last year. This year, we have all the right people and the right seats and we're driving the installed base customers."

Eileen Yu of ZDNet Asia reported from OpenWorld 2012 in San Francisco, United States, on the invitation of Oracle.

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