Sun has found a home, with Oracle. My conjecture is that the Sun Board of Directors felt that an IBM/Sun merger was likely to face costly delays to gain regulatory approvals. Anti-Trust concerns that a merger of two of the world's largest hardware and services suppliers would reduce healthy competition would have made approval in the EU and the US problematic. Sun was losing value too fast to withstand a long regulatory battle. So the Board eschewed IBM as its sole suitor and encouraged the embrace of Oracle.
I don't believe that Oracle has ever sold hardware. So this is a merger of a hardware/engineering firm with strong engineering-style software and services with a business software firm. Both companies have cloud computing in common as the vector for their present and future strategies, so the Sun/Oracle cloud makes as much sense (maybe more?) than the IBM/Sun cloud. Many of Oracle's largest customers already run their server farms on Sun hardware with Solaris or Linux as the O/S and middleware layers and Oracle's database and applications at the software and applications layer.
Both Sun and Oracle have been aggressively moving into Cloud Computing. In fact, I remember hearing the most cogent "outsourcing" argument from one of Sun's top executives about four years ago. The picture he painted was seductive because he talked about something that most SaaS vendors don't discuss. He talked about using the patterns of customers' continuous improvements to inform the future development of Oracle's applications and middleware. If all of your Oracle applications are running in Oracle's cloud, and your firm customizes or adds capabilities to your own applications, that is your proprietary value-add, that is available just to you. But, Oracle, as the SaaS provider will "see" all of the improvements and work arounds made by all of its customers and will be able to detect patterns in these changes, and add those needed capabilities into the base application code. This was a good example of customer-led innovation. I was quite impressed.
There is one main incompatibility that I see between the Sun and Oracle cultures and brand. It's not so much a hardware culture vs. a software culture. It's a predatory sales culture vs. a respectful sales culture. Smart customers--software engineers and architects--LIKE dealing with Sun. Sun's sales people are highly technical. They speak the same language as their customers. They respect and admire their customers' talents. Oracle's customers are the CIOs and Aministrative Officers. They are used to being abused by Oracle's salespeople who are constantly extracting high rents and are hard negotiatiors. Many times, clients have told me how much they hate dealing with Oracle.
Will customers accept the combined brand experience? Time will tell.
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Andrea,
I'm glad you noticed my point about observing patterns in the cloud as a way to capture customers' intent, needs and innovations.
I look forward to meeting you in NY! (although I now have a conflict and may not be there...sigh....)
Posted by: Patty Seybold | April 24, 2009 at 11:36 AM
Thanks for this post and the idea of watching customers in the cloud to inform innovation and new product development. You might like my March 13 post on this idea: http://workingknowledge.com/blog/?p=158
I'm looking forward to meeting you at the World Innovation Forum next month as a fellow blogger. I've been your fan since 1985, when I started working at IBM and first learned about Patricia Seybold Reports. Thank you for all the insights you provide!
Posted by: Andrea Meyer | April 24, 2009 at 09:15 AM
Re: Oracle and MySQL, here's a link to an interview posted on Forbes.com today with MySQL's founder,Mårten Mickos: http://tinyurl.com/dhw5k6
Posted by: Patty Seybold | April 20, 2009 at 07:45 PM
Just realized that one major casualty of this merger may be MySQL-- the open source database that was giving Oracle a run for its money and which was acquired by Sun. The MySQL founders/employees must be aghast that they are falling into the hands of the enemy!
Will Oracle bury MySql?? I can't see them investing in it nor can I see the open source community rallying around it once it becomes an Oracle property!
Posted by: Patty Seybold | April 20, 2009 at 04:18 PM
Another way to phrase the differences in culture between the two are open vs. closed - literally.
Sun's acquisition of MySQL last year was a controversial topic due to potential cultural differences between Sun and the MySQL crew, even though the open source or at least "collaborative" nature of both organizations had some synergy.
As you say, the gulf is much wider between the Sun and Oracle cultures, which makes for very choppy waters in joining the two into a bigger/better beast.
Culture clash = near certain decimation of value of the acquisition.
Posted by: Dan Keldsen | April 20, 2009 at 04:01 PM