I’d still like to know what to call Sun once the merger is complete. Sucle is my favourite, although I suspect it’ll end up being something boring like “Sun, an Oracle company”. While busy decrying the EU investigation into the takeover costing Oracle $100m a day, Larry has also been addressing a technology forum on Monday, and was shy about laying out his plans for world domination.
Key takeaway points from his speech were:
“I would like us to be the successor to IBM”
“We think with the combination of Sun technology and Oracle technology we can succeed and beat IBM – that’s our goal.”
“We are keeping everything. We’re keeping tape. We’re keeping storage. We’re keeping x86 technology and SPARC technology – and we’re going to increase the investment in it.”
“Sun has fantastic technology. We think it’s got great microprocessor technology – it needs a little more investment, but we think it can be extremely competitive. It’s got the leading tape archival systems. We think the Open Storage on their new disk system is absolutely fantastic. Java speaks for itself. Solaris is overwhelmingly the best open-systems operating system on the planet.”
“I shall buy Sun for *seven* *billion* *dollars* muahahahhaha”
“I shall call [Jonathan Schwartz] Mini Me”
Wait, sorry, no – those last two I made up. Although I’m sure Larry is enjoying a Bond villain style evil laugh as he contemplates finally putting the boot in to IBM, whilst stroking his devil goatee.
Joking aside, he’s right – Sun has a lot of really excellent technology, and historically they’ve failed to follow through with most of it. Oracle’s ruthless sales methodology will be striking some fear into some Sun sales managers, but engineers (and customers) should be taking comfort hearing this sort of fighting talk.
Of course, the deal (still!) isn’t done, and it might be a while before we see some systems hitting the market on the back of this enthusiasm. Still, I think Sun have totally neglected the higher end systems, relying on Fujitsu to do the hard graft – with any luck, we should be seeing some big Niagra boxes coming soon.
Well, this was a bit unexpected – but they were one of the only other companies who could realistically make a move.
Oracle have purchased Sun, at $9.50 a share, in a deal valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt.
Larry Ellison has shown for years he has the determination and drive to push a company forward – either by crushing the opposition (a favourite term of a DBA friend) or by buying them out.
Owning the whole stack – from storage, through tin, up to software – plus services will give Oracle a huge amount of leverage and visibility. It’ll also mean they can take on IBM directly at pretty much every level.
Interesting times ahead.
You can read the Sun press release at http://www.sun.com/third-party/global/oracle/index.jsp
Update: Oracle have put up a nice page of FAQs and information at http://www.oracle.com/sun/index.html
An updated story in the Wall Street Journal sheds some more light on the progress to the deal.
Apparently Sun’s board have rejected IBM’s offer – which I think is a sensible move. IBM asset-stripping Sun seems to be the most likely outcome of any deal.
More interesting is the news that Sun’s board is allegedly split, with Schwartz supporting a buy out, and McNealy opposing it. With the news that NcNealy is allegedly heading up a group that wants to take control of Sun and take it private, this is an interesting development.
Is Scott McNealy the right man to take the helm at Sun? Personally, although I think Sun’s management team are good, they lack experience with anything other than a growing company – and that shows with continued losses.
Arguably McNealy has a similar background – but he’s brought Sun through some tough times before, and potentially has the experience to steer Sun through the current problems. As I’ve mentioned before, he also has the mindset and investor confidence to support that.
The question is – what has McNealy been doing since he stepped down as CEO? He’s still Chairman of the Board, and he’s watched Sun continue to make big losses. Is he taking a long game plan to regain control, or is he as culpable as Sun’s current management team?
What future for Schwartz though? He’s been CEO for a few years now, and hasn’t managed to boost Sun’s fortunes. On top of that he’s overseen open-sourcing Sun’s crown jewels, and not following through with selling the support services around that. That’s a pretty major failing in execution.
With Schwartz pushing a deal that would see Sun swallowed whole by their main competitor, and with nothing else to offer investors and Sun’s customer base, I can’t see how he can continue as CEO. Likeable though he is, his position is now untenable, and with him backing a deal with IBM he’s showing Sun’s customers that he’s out of ideas and sees no future for the company.
I don’t believe that is the case at all, and I think he’s sending a very negative message. With IBM backing away I’m not sure he will retain his position for much longer.
I’ve speculated before about Sun taking itself private – it certainly has the capability to do so, even withstanding the dents to it’s balance sheet due to the questionable purchases of StorageTek and MySQL.
News comes from iNewswire that McNealy has resigned from his position at Sun to head up an investment team which will be launching a counter-bid for Sun.
With Paul Ottelini of Intel’s comments that Sun had been hawking itself around Silicon Valley, it’s clear that Jonathan Schwartz either:
- sees no future for Sun as a stand-alone company
- is trying to sell the company while he can recoup some value from it
- has been pushed down this path by Sun investors who don’t understand IT or R&D (yes Southwestern Asset Management, I’m looking at you)
The last point seems the most likely – with the current economic conditions, many investment funds are desperate to recoup whatever cash they can in the short term, as investors panic and want to pull their money out or re-balance their portfolios.
If Scott and his team can follow through, this can only mean good news for Sun and it’s customer base. Like Steve Jobs at Apple, Scott has the narrow focus to push through his vision of how things should be done. Whether he can pull off the whole Jobsian Messiah thing remains to be seen, but I’d place far more credence in that happening than IBM doing anything other than asset stripping the company.
Have a read through the iNewswire release yourself and see what you think.
The rumours continue to do the rounds about the IBM/SUN acquisition, and on top of that comes news that Rackable are to acquire Silicon Graphics.
At this stage no-one is giving out any specifics, which is understandable as neither deal has been finalised and signed off. The coming weeks will be interesting as we get more details from the companies involved.
One thing is certain – with the consolidation of such major players in the IT and HPC business, the industry itself is clearly in the middle of a major shake-up.
When the dust finally settles, will we be seeing business as usual with a smaller number of larger players? Or will the companies involved take the opportunity to deliver some real innovation in the middle of this economic slump?
