Summary
For years Sun Microsystems has slowly watched their market share and profitability fade as their Enterprise servers no longer beat Wintel machines by enough margin to justify the significantly higher cost. For database and web servers, Sun's strong suits, HP and Dell servers running windows now have very little performance difference even though the price for an equivalent Sun server is significantly higher and annual support costs for those servers is also through the roof. So, with Sun's bottom line hitting rock bottom and their future in doubt why would Oracle buy them? My guess is that you will soon see Sun appliances that are optimized for Oracle appearing in the near horizon. If anything can save Sun, it is giving their products a leg up on the competition by having Oracle sales reps. bundling their servers and storage systems with new and existing Oracle software solutions. Will it work? Only time will tell, but to me, buying Sun is looking like a cloudy decision!
Analysis
I have sold server and storage solutions from HP, Dell, IBM, and Sun for over 15 years. During this time I have witnessed the rise and fall of many of those companies. Over the past few years I've witnessed Sun's sales and profitability fall while HP and Dell have gained market share. Any time that you have an acquistion by a company with pockets as deep as Oracle's, you have to think that it will definitely help Sun's long term health. But is it too little too late for a company that is no longer the technology innovator who's products used to significantly outperform those of their competitors? My guess is no and that in the long run this transaction will hurt Oracle and not harm the market share of HP, Dell, and IBM.
