Bangalore: Oracle’s clearly a big shopoholic. Over the past few years, it swallowed People-Soft, Siebel Systems, JD Edwards, India’s i-flex and BEA Systems. And now Larry Ellison is all set to cut a cheque of $7.4 billion to pocket Sun Microsystems.
Clearly, Ellison is trying to make his company Oracle a global software superpower. And embarking on ‘‘binge shopping” is one of the ways to hit that ultimate goal, say analysts.
For Oracle, one way to grab the market of its arch rival Microsoft in core segments like operating systems and browsers is by getting into powerful operating systems. Acquiring or developing such products can be extremely expensive and time consuming. Competing with Microsoft’s well entrenched infrastructure products will also be a tough proposition.
A few years ago Oracle had got into selling massive integrated packages, rather than selling products in bits and pieces, through acquiring the banking technology solutions provider i-flex solutions.
In January 2008, Oracle acquired BEA Systems for $8.5 billion, to strengthen its Fusion middleware software suite and also deepen its footprint in the Asian markets.
Now with Sun, Oracle, which is best known for databases and middleware, will have a complete infrastructure stack. ‘‘The acquisition will complete the Oracle story by improving its market competitiveness. Both the companies have strong presence in telecom and banking and these verticals account for 40% of the revenue of the industry,” said Kapil Dev Singh, country head of technology research firm IDC India.
K K Raman, executive director for IT in KPMG, said, ‘‘With a spectrum of capabilities, software, hardware, applications and services, Oracle will be able to satisfy the entire value chain of customers. It’s gaining monolithic strength in the marketplace. Since both firms are already present independently in India, the deal will not have disturb the landscape.”
The deal is seen to be a winwin for the companies. ‘‘With a wide portfolio of software (ERP, CRM, SCM, business intelligence), hardware (servers & storage) and services, the combined entity could give a tough time to IBM and HP,” said a Dataquest analyst. A loss for free software movement?
Bangalore: In an interview to TOI over the phone from San Francisco last month, Sun Microsystems CEO Jonathan Schwartz said that in a survey the company did among 2,000 students worldwide, less than 6% knew Oracle, but over 90% knew Sun’s rival database product MySQL. He also said there was “unprecedented migration” to free software like MySQL, especially from Oracle database customers.
Schwartz saw free software as enormously more popular than proprietary software — like those of Oracle and MS — among segments like students, who have more time than money. Universities, he said, are major seeding grounds for innovations in free and open source products. “And when these students join the workforce or start their own companies, they disproportionately tend to select free software,” he said.
Yet, he has been compelled to sell out to the very company he thought he was out-smarting. The idea was to build a powerful developer network (India had the biggest Sun network with 7.8 lakh developers) by giving its software free to “those that have more time than money”, and sell its service and support to “those that have more money than time”. But looks like that strategy ran out of time. “Our high end business was up 20% a little over a year ago, it was down more than 20% in the December quarter of 2008 — across industry, customers are holding off on big ticket purchases,” Schwartz blog says.
So what happens now to Sun’s free software movement? Some analysts think products like MySQL are safe in Oracle’s hands. Writes an analyst in Infoworld.com, “MySQL’s user base sits largely at what you might describe as the low end of the database market. That’s a niche that has been slipping through Oracle’s fingers as its own database has grown in sophistication, complexity, and cost. By acquiring Sun, Oracle would be able to offer its customers a popular, well-recognised entry-level database, with an implicit upgrade path to Oracle’s proprietary product as those customers’ needs grow.”
Yet, open source supporters are likely to feel a sense of loss. But all those can take heart from this line from Schwartz: “Fighting free and open software is like fighting gravity”.

Source: Times of India

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