Summary
While this analysis is not about the acquisition of Sun itself (which I believe is a wrong one), it provides guidance to Oracle the "Do's" and "Don'ts" in getting some value. The critical recommendation is to form "Oracle Labs" - a think tank to innovate and stay competitive with Google and Microsoft.
Analysis
When companies merge, the three critical factors are people, product, and process, and in that order. Culturally, Sun was a product centric company (their professional services were not world class). This implied that they fostered a culture of innovation and "a try and do the best" attitude. Oracle's move from databases to ERP and to professional services focused on building a culture of customer service and efficient delivery. These two cultures will clash and there is no middle ground. The products are divergent. Sun's product strategy was Ready, Fire and Aim approach as compared with Oracle's customer-centric model.
One solution is to create Oracle Labs. This proven model will help nurture the Java and operating system products at Sun, get rid of the slack and integrate what is best within their other products and professional services with mainstream Oracle.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
