So after all the rumours, it is Oracle that has picked up Sun Microsystems, for $5.6bn net of cash.
While the speculation surrounding IBM’s rumoured acquisition of Sun tended to assume that there were no other sensible acquisition candidates, I have tended to disagree. It occurred to me that a great acquirer would have been Microsoft.
Yes, I said Microsoft. I know you’re thinking that Microsoft is a software firm, and has been a fierce Sun rival for many years, but just think about it for a moment. Oracle has been both of those things too.
Microsoft is building out its Azure cloud computing platform as we speak, and has said it needs to build around 40 new data centres round the world to give it the necessary capacity. Sun could save it billions of dollars in that goal alone. Microsoft’s .Net software is fine but not quite a match for Sun’s Java, nor does it run on the over 10 million devices that Java does.
Microsoft is running out of headroom remaining a software company that does little to embrace the open source model — Sun has a very strong story in open source and could have radically transformed Microsoft’s business into one that adopts a new openness about its software, uses Sun’s amazing distribution channels thanks to things like the downloads of Java and MySQL, and create a really compelling stack that went from cloud computing, to open source software, to the desktop.
Sure, Oracle will be able to make all sorts of hay thanks to this acquisition. But I believe Microsoft could have done even more. Oracle expects to be able to add $1.5- to $2bn profit to its bottom line by adding Sun to its mix. But what effect on its database business will MySQL hold in store? And didn’t Larry Ellison once say that there was no point buying things like JBoss because he could just take the code and offer it to users wihtout stumping up the acquisition price?
I don’t know, it’s just a theory. But given Ellison’s record, it would not surprise me one iota if the SEC filings which are expected to detail the ins and outs of the Sun sell-off suggest that at least one other massive software powerhouse showed an interest.
Whether or not there’s any substance in this thinking, it is surely going to be fascinating to watch what Oracle does with Sun, how seriously it takes its new hardware business, and how it grapples with the acquisition of a vast open source business that doesn’t exactly sit easily with its own vast commercial software operation.
But what do you think? Drop me a comment.
