At Collaborate Charles Phillips said that Oracle was in the hardware business to stay. Larry Ellison was quoted today as saying the same thing. Could they both just be having some fun with us? I can offer no concrete evidence beyond a special twinge in one of my toes (the right foot “ate good roast beef” toe) that usually is a psychic signal that something is amiss. So for fun, let’s read the available tea leaves.
The wire services today also indicate that Sun has admitted legally that another suitor besides IBM was actively engaged when Oracle sealed the deal. The most informed guess is that it was HP (Cisco and Dell are less likely possibilities). Oracle almost certainly had a good idea of who else was interested and why.
At the most recent OpenWorld Oracle first put its toe (left foot “went to market”) in the stormy sea that is the hardware market by partnering with HP on a database appliance. Would Oracle turn on one of its strongest allies only a few months later by grabbing Sun to become a fierce competitor? Is it not at least possible that Oracle made the calculation that it could buy Sun and then, after clearing the regulatory hurdles, quietly spinoff the hardware, ideally to a business with which it already has a hardware partnership?
Having such a deal full baked in advance would likely be illegal and Oracle has lots of overly careful lawyers. At the same time, Oracle could be betting on its ability to sell off the parts it doesn’t want later even without a deal negotiated in advance.
If this line of thinking is correct, Phillips and Ellison would have no choice at this point but to say that Oracle was intending to keep everything. To say anything else would kill the already fragile deals in the Sun pipeline. It could also make a mess of the process to get regulatory approval.
Assuming for the moment that Oracle does intend to keep all of Sun, will everything work out well? A future posting will explore this possibility in more detail but for now we remain skeptical. Having said that, Oracle is currently on a roll in terms of how well the last forty or so acquisitions have worked out so perhaps they once again know better than those of us who watch from the sidelines and guess what will happen.