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IBM's loss is Oracle's gain

Sun has been shopping around for a buyer to help it turn around its falling profits and margins for a while. IBM and Sun were in talks over a potential deal -- IBM offered Sun $9.40 per share and the offer was met with resistance by Sun's board.

That resistance led IBM to walk away from the negotiations. The Wall Street Journal reports that Oracle has now agreed to purchase Sun for $9.50 per share. The value of the transaction is $5.6 billion and excludes Sun's cash debt. Sun reportedly had about $2.6 billion in cash and short-term investments and $700 million in long-term debt as of December 28, 2008.

A Sun/Oracle merger makes sense with Sun servers being sold with Oracle database software for a long time. Buying Sun will allow Oracle to offer complete solutions of hardware and software to businesses looking for a one-stop shop.

Other than the issue with IBM offering less than Sun's board wanted for the company, reports had IBM being concerned about antitrust issues stemming from the purchase. Oracle is believed to have less of an antitrust issue since it has fewer businesses that compete directly with Sun.

Oracle executives believe that the purchase will pay off quickly for the company despite the fact that Sun has been posting losses for the last three quarters. Sun is expected to add more than $1.5 billion to Oracles operating profit excluding charges and other items in the first year with that number growing to over $2 billion the second year after the purchase.

The Wall Street Journal reports that some analysts were stunned by the purchase. AMR Research analyst Bruce Richardson said, "The last thing you expected was a database-software company to buy a hardware customer base."  



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A dime more a share...
By Boze on 4/20/2009 12:25:11 PM , Rating: 2
...well I guess it matters when you're sitting on millions of shares...

My God, what's that smell?!

Desperation?? Is that you?? Why I do believe it is!




RE: A dime more a share...
By phxfreddy on 4/20/2009 1:05:37 PM , Rating: 4
I wonder what is going to happen in regards to MySQL in the hands of Oracle.

Stick a fork in the road ahead?


RE: A dime more a share...
By kattanna on 4/20/2009 1:16:12 PM , Rating: 2
and open office.


RE: A dime more a share...
By ChuckDriver on 4/22/2009 10:47:06 AM , Rating: 2
I hope they have an incentive to keep and maintain Open Office too. Maybe they'll do it to irritate Microsoft.


RE: A dime more a share...
By lukasbradley on 4/20/2009 1:18:47 PM , Rating: 2
Agreed. Been debating this in my head.

I honestly believed Oracle was going to commit strongly to open-source services and support for profit when they chased JBoss. I convinced myself that they wouldn't simply kill the product.

It will be interesting to see what happens here.


RE: A dime more a share...
By psychobriggsy on 4/20/2009 1:52:20 PM , Rating: 5
Oracle have a massive amount invested in Java, and Sun have been quite tardy over the past few years in getting updates to Java released.

With a Microsoft stack of operating system, database and platform (Windows, SQL Server, .NET) rapidly evolving, Oracle could see their database product losing sales. Now Oracle can offer an operating system (Solaris), database (Oracle, MySQL), platform (Java) and hardware, and they can drive Java development on again instead of faffing around with the slow community driven Java no-release cycle.


RE: A dime more a share...
By TomZ on 4/20/2009 3:15:17 PM , Rating: 1
Good point - it seems like Java has lost all its momentum over the past few years. While it enjoys good usage in servers, its usage on desktop and mobile devices is certainly decreasing.

And in meantime, Microsoft has been very hard at work improving .NET... A few years ago, the idea of writing a desktop app using Java was within the realm of reason. Today, no way.


RE: A dime more a share...
By smackababy on 4/20/2009 3:50:22 PM , Rating: 3
I use JAVA and Oracle everyday and I could never imagine coding in JAVA for anything desktop related.


RE: A dime more a share...
By Taft12 on 4/20/2009 3:58:16 PM , Rating: 1
If you code in Java and Oracle every day, then clearly you DON'T code for anything desktop-related! Things are a lot different where you sit over there on the server-side.


RE: A dime more a share...
By omnicronx on 4/20/2009 3:52:17 PM , Rating: 2
quote:
A few years ago, the idea of writing a desktop app using Java was within the realm of reason.
I 100% disagree, if anything it makes much more sense, as the little extra overhead that java requires is no longer an issue with the powerful machines of today. This is what most developers complained about.

Java really has not lost any momentum either, in fact it is .net is still catching up. Hibernate and Spring are vastly superior to anything .net has to offer, (and subsequently, have been ported to .net, although not nearly as robust).

Furthermore .net programmers are dime a dozen, I just wish I knew that before going through 4 years of school. Everywhere I applied in different cities, Java entry level developers got as much as 20% more salary, with this rising significantly for senior developers. Lucky for me, I have been learning Java myself for the past 8 years and decided to make the switch from C# (which really is not that much of a switch at all).

And don't get me started on web tier apps, this is where you will see most of Java's advancements in the next few years (and this is what the most skilled Java programmers have been moving to)

As for desktop Apps, although it requires more coding than the simplistic .net, the Swing Application Framework has been nothing but great to me.

Before the .net framework became popular you may have had a point, the latest and greatest of .net is not native to all windows machines, thus the JVM requirement that everyone also complains about is becoming less and less of a issue.


RE: A dime more a share...
By TomZ on 4/20/2009 4:36:53 PM , Rating: 2
Well, obviously I disagree. First, I've programmed in Java+Swing and WinForms, and there really is no comparison. The development experience and the final result is far superior in WinForms. Swing apps are slow and ugly, unless you're willing to invest thousands of hours to write code to make up for the shortcomings as some commercial app vendors have. No thanks.

Plus there are lots of very robust third-party commercial controls available for WinForms. In Java, there's, well, mostly shareware...which means apart from some gems here and there, it mostly sucks.

The next problem with Java desktop is the terrible installed base of JDK, not to mention a "recent" version. That was the biggest issue we had, was lots of customer complaints about having to install the JDK. At least with .NET it is integrated with newer versions of the OS and pushed by Microsoft Update to older versions.

I do like the "run everywhere" (or "debug everywhere" as it's been called) aspect of Java. That is perhaps the only advantage of Java for desktop. But since most desktops are also running Windows (especially in the corporate world), it becomes a moot point.


RE: A dime more a share...
By omnicronx on 4/20/2009 5:02:58 PM , Rating: 1
All depends on what you are trying to do. I will never again attempt to make a DB frontend using .NET. Java is far superior in just about every way, in this case it is not slow compared to .net, and being a DB frontend, how 'ugly' it is does not really matter.

Would I make a mainstream desktop application using Java, probably not, .net is far more robust in this case.

P.S You are kidding about free WinForms controls right? There are a ton more shareware WinForm controls than its Java equivalents. Furthermore they are usually free in Java as long as you are not selling a product using the technology (in which the source is not included), i.e you usually won't pay anything if it is in house software.

There are also many simple things missing from .net such as their lacking FTP api. In the past 2 years with Java, I have paid for the Java Service Wrapper which is more than worth it, everything else was open source and free. In my first year as a .net programmer I had to buy countless controls and other plugins.


RE: A dime more a share...
By AlexWade on 4/20/2009 9:41:43 PM , Rating: 2
quote:
Furthermore .net programmers are dime a dozen, I just wish I knew that before going through 4 years of school. Everywhere I applied in different cities, Java entry level developers got as much as 20% more salary


Are you serious? Wow. When I came out of college, I did my best work in Java. In fact, I had a project so good I was accused of cheating (without proof by my professor). It was a calculator in Java that would solve equations and give an exact answer. No 0.3333, but 1/3. I came out of college and couldn't get a job, this was 2003. It all worked out in the end because I started my own business making web pages, which was my second best work. Now have a great schedule in that I don't have to get up early and deal with traffic.


RE: A dime more a share...
By segerstein on 4/20/2009 3:54:06 PM , Rating: 2
Java mobile used to be the only way to write applications for 95%+ mobile phones not so long ago.

But lately Symbian share is rising, WinMo is getting popular with HTC devices, Apple has iPhone, Google has Android. Only BBs rely on Java these days.

Sony Ericsson was strong in high-end and middle range phones with good camera and walkman features. But now people don't want to pay premium for a phone without OS, and GPS with Java just sux.


RE: A dime more a share...
By omnicronx on 4/20/2009 4:30:34 PM , Rating: 2
I'm not exactly sure what on earth you are talking about.

BB = 99.99% Java based

Symbian = 95%+ Java driven

Windows mobile = Java supported on most devices, (came on my phone stock)

Thats a huge portion of the market to discount! Java is a true multiplatform language, it is going to be on any most mobiles phones for a long time to come.


RE: A dime more a share...
By segerstein on 4/20/2009 5:58:27 PM , Rating: 2
quote:
I'm not exactly sure what on earth you are talking about.

BB = 99.99% Java based


Yes, I wrote that BB is the only smartphone that relies on Java. But Java (MIDP) is no competitor to native OS programs in terms of access to OS APIs, speed and memory usage. But BB applications are not confined to MIDP APIs, but for the most part use BB specific APIs.

Smartphones = phones that can run SW other than MIDP


RE: A dime more a share...
By TomZ on 4/20/2009 6:30:13 PM , Rating: 1
So basically Java on mobile suffers from the same fundamental problems as Java on desktops.


RE: A dime more a share...
By omnicronx on 4/20/2009 6:46:00 PM , Rating: 2
quote:
But Java (MIDP) is no competitor to native OS programs in terms of access to OS APIs, speed and memory usage.
At the OS level, without a doubt, at the application level, many would disagree depending on the situation. You also cannot discount the cross platform aspect. The difference between code between one platform to the next can be almost nothing depending on the differences in hardware. Opera Mini is a perfect example of this. Its faster than any other browser, even those that have taken the same approach and are based on webkit programmed using native code. (see bolt vs opera mini)

And Why focus on BB? Symbian is still has more marketshare than all other smartphone OS's combined. Yet their entire Application Layer is Java based.(but the OS itself is not)


RE: A dime more a share...
By Taft12 on 4/20/2009 3:56:05 PM , Rating: 2
quote:
I wonder what is going to happen in regards to MySQL in the hands of Oracle.


The products have 2 completely different markets. MySQL will be a tremendously valuable foot-in-the-door when SMBs need to scale up their RDBMS.


RE: A dime more a share...
By omnicronx on 4/20/2009 4:33:35 PM , Rating: 2
MySQL is also very lightweight, and is perfect for webtier apps that do not do a lot of heavy lifting. Not to mention PHP and MySQL go hand and hand these days ;)


RE: A dime more a share...
By Netscorer on 4/20/2009 6:35:51 PM , Rating: 2
The only issue I see is that Oracle already has direct competitor to MySQL in Oracle Lite. There will be no incentive for them to support two lightweight database platforms when one is good enough.


RE: A dime more a share...
By omnicronx on 4/20/2009 6:49:47 PM , Rating: 2
MySql can't really be compared to Oracle lite. MySQL is used alongside oracle all the time, Google and Facebook do behind the scenes to name a few. Oracle lite is a stripped down version of oracle that lacks basic features thay MySQL has had for a very long time.


RE: A dime more a share...
By TA152H on 4/20/2009 1:22:21 PM , Rating: 2
It's not just that, there were a lot of anti-trust issues with IBM buying up Sun. They probably do not exist with Oracle buying them, since I don't think MySQL would raise any anti-trust concerns, which is the main area they overlap.

I feel stupid I never saw this coming, even though it does make a lot of sense.

It might mean a new lease on life for SPARC too, since Oracle can almost offer it and their software as a package, and tailor the processor and software to run very well with each other. I think Oracle could give a lot of confidence to the SPARC line if they chose to continue it.

I think it's a really good mix, and will be really interesting in terms of what children it produces. I'm actually happy about this transaction, the IBM one left me a little cold.

I can imagine the reaction of IBM when they found out about this. They probably felt it was another Yahoo scenario, and the price of Sun would fall. Heck, I thought that too, as did most people.

This was a nice surprise.


Oracle of the Sun
By elessar1 on 4/20/2009 12:26:26 PM , Rating: 2
Is the Oracle of the Sun!!!

Lets hope this does not erode support for Oracle in other platforms (HP/IBM)

cheers..




RE: Oracle of the Sun
By omnicronx on 4/20/2009 3:29:23 PM , Rating: 2
quote:
Lets hope this does not erode support for Oracle in other platforms (HP/IBM)
I'm more worried about Java, they better not strengthen support for Oracle and spend less time on other RDBMS's. Oracle is great for enterprise use, but it utterly useless and far too expensive for mid to small sized projects.


That's really a shocking news!
By tharunraj on 4/20/2009 1:33:28 PM , Rating: 3
Initially I was disappointed when IBM walked off on the SUN offer. I had a feeling that SUN's situation is going to end up like Yahoo. But after this news, I believe everyone in the tech industry should be shocked. If IBM really did acquire SUN, it would have only made an already strong company much more stronger. But if Oracle manages to acquire SUN, things would get pretty interesting with a new competitor in the Server market. And the future of Java and MySQL? Now that's going to be really interesting!




Hmmm...
By Jeff7181 on 4/20/2009 12:49:00 PM , Rating: 2
(watches JAVA and ORCL like a hawk)




My only hope...
By Mindless Rambler on 4/20/2009 1:28:49 PM , Rating: 2
...is that VirtualBox development is not hindered.




What about App Server servers?
By bahadirg on 4/21/2009 7:35:49 AM , Rating: 2
I just really wonder what will happen in Appl. Server side. Oracle who owns Oracle Appl. Server has previous bought BEA and now gained the control of Glassfish and Java. Is the openSource world and free App. Server market coming to an end?




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