Oracle-Sun: an enterprise catastrophe
Oracle acquires Sun- that came out of left field. Well not quite. Fellow Irregular Josh Greenbaum talked about Oracle 'completing the picture' with a Sun acquisition back in 2003. Yes - SIX years ago.
Putting on my curmudgeon's curmudgeon hat I can't help but think this is a dark day for the enterprise computing business. Who worse to entrust your entire stack than Oracle, that voracious consolidator of application providers and now, it seems, guzzler of open source and hardware? As Tom Steinert-Threlkeld notes from Charles Phillips, Oracle president's throw away line:
This could lead to, in effect, shrink-wrapped suites of hardware and software for specific sectors of the economy, from retailing to banking to communications. He called this delivering “a complete industry in a box.”
The promise is that corporations will have what they’ve always said they wanted: one neck to choke.
Well, having a single throat to choke might sound like a good idea, but not when your testicles are in the 22% maintenance vise. Or, as Vinnie Mirchandani reminds us:
Oracle's numerous acquisitions over the last few years have not been rationalized and there has been little new or innovative stuff coming out of Oracle (ironically, one of the few is Exadata, a joint development with HP, which will need to be re-evaluated with this acquisition) while the executives continue to brag about the margins they squeeze by consolidating SG&A from the acquisitions.
As I wrote in February "Its top executives are deal makers, not technology visionaries. Worse, when it comes to their acquisitions, they cannot retain or easily replace the entrepreneurial talent."
It is a sad commentary on the state of the industry that Sun's only other home would have been IBM, which in its own way has also become a graveyard for once innovative technology companies.
Dana Gardner tries to apply some sunshine to the event:
Among them is the fact that IBM now — for the first time, really — has a true, full and global counter weight to its role and influence. Oracle plus Sun aligned with Hewlett-Packard (which I fully expect) meets and begins to beat IBM at all the important full-service IT games.
I think he's plain wrong. If anything, the Oracle-Sun deal allows for a stronger grip on IT budgets but for what? Is Oracle really going to deliver better value when it's already forecasting signficant incremental profit to the bottom line?
In our ongoing Irregular discussions, Anshu Sharma (ex-Oracle) thinks he knows how this plays out. In summary:
- Oracle keeps all the software components
- Oracle starts selling off or shutting down the hardware businesses with HP getting the first right to refusal - starting with storage (to HP/EMC), desktop products (HP), Networking (HP), Microelectronics (HP/any Semi player) and finally servers, parts of which may be kept back for the "Machine" dream
- Oracle keeps a small team of systems engineers from the servers and storage business to work on Exadata. This machine is already a partnership with HP so the work could go on with people on either side of the fence.
I'm not so sure. The Twitterverse was alive with musings about what happens to MySQL. See snapshot below with 175 more updates in the few minutes it took to search and snap this image then upload: It didn't take one wag long to posit: "Prediction: after acquiring Sun, Oracle's first move will be to change the product name from MySQL to Larry'sSQL"
James Governor, another Irregular and co-founder of analyst firm Redmonk wonders whether Drizzle could turn out to be a major data store winner.
Drizzle? James' partner Stephen O'Grady wrote about this MySQL fork last year. From what I know of the open source community, it would not surprise me to learn that developers are looking for another DB home. At least while there is uncertainty in the air.
But then all may not be as gloomy as I imagine. In email, Miko Matsumura VP and Deputy CTO at Software AG said: "With the MySQL team out of the company and the code base forking, there's very little leverage other than professional services. Oracle provides almost *no* leverage in professional services compared to IBM.
Instead of taking a fundamental open source approach which is primarily driven by services revenue anyway, Oracle is moving to a systems approach. This is not a terribly optimistic acquisition in my opinion. On the one hand, it shows Oracle as acquisitive and opportunistic—but we knew that. But I bet there are many forces inside of Oracle who are dead set against this deal. Oracle doesn’t have the skills to pull this off, and if there is a rationale for the deal, it's being driven out of the CFO side of the shop, not from the software product side."
Now there's a shot across the bows if I ever heard one.
As always with these things, Oracle may yet surprise. It's done a good job in making its past acquisitions profitable. Given Miko's 2 cents, is this the banana skin some of us have been waiting for?