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The acquisition of Sun Microsystems by Oracle, if it is closed as expected, would give Oracle a company whose business model has been rocky but would bring it some of the industry's top hardware and software technology and strengthen its open-source offerings.
Oracle on Monday said it plans to acquire Sun in a $7.4 billion deal announced shortly after an earlier bid by IBM to acquire Sun fell through.
Oracle and Sun have had complementary businesses for years, and a significant if not majority portion of Oracle's installed base has been on Sun hardware and Sun's Solaris operating system.
The proposed acquisition of Sun would force Oracle to decide how much of a hardware vendor it wants to be, as the software side of Sun is very compatible with Oracle's product offerings.
Oracle is one of the IT industry's largest software vendors, with core competencies in databases, middleware and other business applications, and an acquisition of Sun would bring a wide range of complementary technologies with limited overlapping of its existing products.
Sun would bring Oracle the MySQL database, based on open-source technology. Sun currently provides the MySQL database as a free download, with customers paying Sun and/or its solution providers for support.
Database software, on the other hand, is Oracle's primary revenue generator.
Oracle would have a few options with MySQL. Its first choice would be whether to keep or sell or kill MySQL. Keeping it, and maintaining its open-source availability, would give Oracle a strong weapon with which to increase its competitiveness against Microsoft's SQL Server and IBM's DB2 database applications.
This could be especially true if Oracle was able to target MySQL deployments at either smaller customers it currently does not serve or at departments or branch offices of customers of its own database software, thereby pushing its rivals out of such opportunities. However, there would be a balancing act in such a scenario in that Oracle would want to protect its existing market.
Oracle also could sell or kill MySQL. Selling it might mean competition for Oracle in the long term, but at the same time would continue the competition against SQL Server and DB2. Killing MySQL, however, could cause an uproar in the open-source community and play into the hands of Microsoft and IBM.
The other software technology with overlap between Oracle and Sun is security, especially identity management. The acquisition would allow Oracle to combine the code between the two, potentially making it a stronger offering.
Security also is an important component of Sun's Solaris operating system. Solaris, which Sun has brought to open source, has traditionally been tied to Sun's proprietary hardware, but has more recently been ported to the x86-based market, both on Sun's x86-based servers and those from competitors such as Hewlett-Packard and Dell.
Oracle could continue the development of Solaris as a way to not only provide a secure base on which to deploy its software stack, but as a competitive tool against archrival Microsoft and its Windows-based operating systems.
Oracle is currently a strong supporter of Red Hat Linux, so there might be concerns that a push to develop Solaris could lessen the Red Hat support.
With Solaris also comes Sun's ZFS file system, which provides advanced data security and data management features.
Another key software prize is the Java programming language, which was developed by Sun but is now an open-source project. Java is currently in use in more than 800 million PCs and 2.1 billion mobile phones and handheld devices, according to Sun.
Oracle also would get the StarOffice suite of office software. Microsoft's Office suite is the primary competitor to Sun's StarOffice and its free-of-charge, open-source version, OpenOffice.org. So this part of the acquisition would give Oracle another powerful tool for competing with Microsoft.
Oracle also might find useful Sun's server virtualization technology, including its Solaris Containers and its Xen-based xVM, another platform for continued development. Oracle also has its own virtualization technology, Oracle VM, which it offers for free.
Sun also would bring to Oracle a wide range of other software technologies, including its GlassFish application server, high performance computing (HPC) and clustering, and a wide range of Web services.
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