The 10 Biggest Oracle Stories Of 20104:00 PM EST Thu. Dec. 16, 2010
You can say this about Oracle, things are never dull with CEO Larry Ellison & Co. This year included Oracle's $7.3 billion acquisition of Sun Microsystems after nearly a year of regulatory maneuvering, the hiring of former Hewlett-Packard CEO Mark Hurd to replace Charles Phillips as president and a jury's awarding of $1.3 billion in damages in Oracle's copyright infringement suit against SAP.
Here's our list of the Top 10 Oracle stories for the year.
Oracle and Sun announced the $7.4 billion acquisition on April 20, 2009. But clearing regulatory hurdles from the European Union took time and the companies didn't wrap up the deal (for $7.3 billion, a bit less than originally negotiated) until Jan. 27.
Oracle's new ability to sell complete hardware-software "stacks," from server, to operating system and middleware, to database and applications, brought a level of IT integration not seen since the days of the IBM mainframe. It's also accelerated the industry consolidation toward a handful of "one-stop shop" IT vendors.
And Sun channel partners have been dealing with the repercussions all year. Oracle said from the start it would sell Sun products directly to big-account customers, reversing Sun's trend of selling more products through the channel. And in October, Oracle cut Sun resellers out of the maintenance renewals business. The message from Oracle: Sun resellers must add value to their service offerings, not just fulfill sales.
Oracle shocked the industry Sept. 6 when, in back-to-back press releases, it announced that President Charles Phillips had resigned and former HP CEO Mark Hurd had been named to replace him.
Hurd's appointment, with a $950,000 salary and eligibility for up to $10 million in bonuses, came just weeks after he resigned from HP because of charges of misreporting expenses. Oracle's move caused a rift with one-time ally HP. But there were indications that some HP channel partners might follow Hurd to Oracle.
As for Phillips, Ellison was quoted in a press release saying that Phillips had wanted to "transition out of the company" since December, but Ellison had convinced him to stay through the Sun acquisition. In October Phillips landed a job as CEO at Oracle competitor Infor.
On Nov. 23 a U.S. District Court jury concluded that SAP, Oracle's chief rival in the applications business, owed Oracle $1.3 billion in damages caused by an SAP subsidiary that illegally downloaded Oracle software and support materials. The verdict came after a three-week trial that riveted Silicon Valley.
The case reached back to 2005 when SAP acquired TomorrowNow, which provided support services for Oracle applications. TomorrowNow, which SAP shut down in 2008, downloaded copyrighted software and documents from Oracle support Web sites. Oracle sued in 2007. Before the trial SAP admitted liability in the case, leaving only the question of damages, which Oracle argued were as much as $2.3 billion while SAP said were around $40 million.
The jury decision is seen as a blow to SAP's reputation and could impact the company's sales and profitability, industry analysts said.
Perhaps the schism was inevitable following Oracle's purchase of Sun, a move that put it in direct competition with one-time ally HP.
Still, when the fallout happened, it came with an intensity few had foreseen. When HP CEO Mark Hurd was pushed out following charges of misreporting expenses, Ellison criticized HP's board for its actions. When Oracle hired Hurd as president, HP sued, arguing that Hurd could compromise HP trade secrets. Ellison responded with a blistering statement threatening to end Oracle's partnership with HP.
The suit was resolved Sept. 20, but the damage was done. The relationship sank lower in October when HP hired former SAP CEO Leo Apotheker to replace Hurd. Ellison criticized HP's board for the move saying members should "resign en masseright away. The madness must stop." Things hit bottom in November when Oracle unsuccessfully tried to subpoena Apotheker on his first day as HP CEO to testify in Oracle's copyright infringement lawsuit against SAP.
Signaling it will aggressively defend its newly acquired Java technology, Oracle sued Google in August claiming that Google's Android mobile operating system violated Java patents and copyrights.
The lawsuit pits Oracle, one of Silicon Valley's long-time technology powerhouses, against Google, which has become one of the IT industry's major players in the last decade. Google responded by denying Oracle's charges and in a court filing sought to have the patents declared invalid.
Oracle acquired Java and its related patents and copyrights when it bought Sun Microsystems for $7.3 billion. In the suit Oracle called Java "one of the most important technologies Oracle acquired with Sun," noting that it has attracted more than 6.5 million developers.
At the massive Oracle OpenWorld conference in September Ellison declared that Oracle's next-generation Fusion applications would begin shipping by year's end. Attendees could be forgiven for a feeling of d�j vu, given that promises of the new software's imminent availability also had been made in 2008 and 2009.
Under development for five years, Fusion is designed as an upgrade path for users of Oracle's E-Business Suite, PeopleSoft, J.D. Edwards and Siebel applications. The collection includes more than 100 financial, CRM, human resource management, supply chain management and procurement applications.
But Oracle is emphasizing that it will continue to support its current application product lines for years and will not pressure customers to switch to Fusion.
When Oracle acquired Sun Microsystems, it also came into possession of a number of open technologies including Java, the MySQL database and the OpenSolaris operating system. Since then there have been questions about Oracle's commitment to open source.
At Oracle OpenWorld Thomas Kurian, Oracle executive vice president of product development, vowed that the company would keep Java an open-source technology. He was responding to questions generated by Oracle's lawsuit against Google claiming infringement of Java patents.
But actions speak louder than words and some of Oracle's actions, such as discontinuing development of OpenSolaris and developing a version of Linux that's incompatible with Red Hat, make some people uneasy.
Among those departing Oracle after the Sun acquisition were James Gosling, the original designer of Java, and Simon Phipps, Sun's chief open source officer.
While Oracle's purchase of Sun Microsystems was the software vendor's biggest acquisition of the year, it was far from the only one. As it has for the last five years or more, Oracle aggressively went on the prowl to buy companies with technologies that filled critical gaps in Oracle's product line.
Within two days in February, for example, Oracle struck deals to acquire SOA management software developer AmberPoint and service broker software developer Convergin. That was followed later in the year by purchases of Passlogix (identity management software), Secerno (database security) and PSS Systems (e-discovery applications). Aside from Sun, Oracle's biggest deal was its $1 billion buyout of e-commerce software developer Art Technology Group.
Oracle also took a big step into the market for life sciences and pharmaceutical applications in April through a deal to acquire Phase Forward for $685 million.
In 2009 Oracle debuted its plan to encourage channel partners to become certified, or "specialized" in Oracle parlance, in Oracle technologies. But it was in 2010 that Oracle executives really hammered home the message that if VARs really wanted to succeed as an Oracle partner, specialization was the way to go.
New CEO Mark Hurd, in his first time speaking to Oracle solution providers in September, stressed the need to add value through specializations and services. Tom Wagner, Oracle group vice president of North America hardware alliances and channels, had the same message for Sun resellers while speaking at the Avnet Technology Solutions 2010 Summit in July.
At Oracle OpenWorld in September the company unveiled an expansion of the Oracle PartnerNetwork Specialized program, adding a new "Diamond" tier to the program and a new category of "Advanced Specializations" for partners.
After wrapping up its Sun Microsystems acquisition, Oracle devoted the rest of the year making it clear that it intends to be a major player in the computer hardware market.
At Oracle OpenWorld in September the company took the wraps off of the Oracle Exalogic Elastic Cloud server specifically designed to run public and private cloud systems. The server combines 64-bit x86 processors, a total of 30 compute servers with 360 cores, with Oracle middleware such as the WebLogic server and Oracle Virtualization. Oracle also unveiled an upgrade of its Exadata database machine, Oracle's first hardware product that debuted in 2008.
And in December Oracle challenged IBM and Hewlett-Packard, it's closest hardware competitors, with the new SPARC Supercluster server that's configured with 108 SPARC T3 processors and capable of processing 30 million transactions per minute. CEO Larry Ellison mocked HP's Superdome server, calling it the "TurtleDome" server.
Check out the other biggest IT vendor stories of 2010.