By Tim Negris

The MySQL melodrama in Europe was sufficiently long and loud to make many of us almost forget about the other things that Oracle is getting from buying Sun, and about the reasons why Oracle is doing the deal in the first place.  Sure, the popular open source database is important to Oracle, but not for the reason that mother Monty Widenius would have us believe – that Oracle is neutralizing a gathering threat – not at all.  But, more on that in a minute.

The Spoils of Oracle’s Acquisition

First, let’s inventory the other things Oracle gets by buying Sun.   Of course there is the rhinoceros in the rec room, hardware, comprising big-ass servers, thin-client desktop, and numerous storage devices and systems.  To run that hardware, there is an unencumbered proprietary operating system, the venerable non-Linux, SCO-indemnified UNIX variant, Solaris.  Running on that hardware under that operating system is a ton of middleware, including the Glassfish app server, Java web and proxy servers, the Hotspot virtual machine, and, of course, MySQL.  Connecting all of those systems is an impressive brace of Ethernet, Fiber Channel and Infiniband hardware and software.   And, to program all of the above, there is the Java programming language.

And, there is one more thing that Oracle gets from the Sun acquisition: StarOffice, the proprietary version of OpenOffice, the thoroughly feature-faithful Microsoft Office clone.  But StarOffice comes into the picture with some mystery.   If one types “http://sun.com” into a browser address box, one is instantly redirected to http://www.oracle.com/index.html, the standard Oracle homepage whereupon the Sun acquisition is, of course, featured front and center.  So, sun.com is disappeared.

And, if one types “StarOffice” in the Oracle homepage search box, it returns fewer than ten random hits, none of them specifically focused on StarOffice.   Odd.  But, if one returns to the browser address bar and types “http://www.sun.com/software/staroffice/index.jsp” instead, lo and behold, it goes to that very page with no redirection.   And, it is not a vestigial page from the old Sun site.  It is a fully Oracle-branded page, accessible from the home page by the path “Home > Products > Software > Desktop > Office Productivity >”, despite its puzzling absence from Oracle site search index.   They are a database company, after all; one would think that they index everything, and quickly.

In any case, from the page under the “Get It” tab there, one can buy StarOffice from Oracle for $34.95, which is, incidentally, approximately one tenth the price of the roughly equivalent offering from Microsoft.

Why Oracle is Buying Sun

So, all of that is most of what Oracle gets by buying Sun.  Now let’s look a little more closely at why they are buying it.

What the company says about it is not disingenuous, but it is only a part of the story.  For years, Larry Ellison warned customers about the folly of buying best of breed software products and to help them avoid doing that, he bought up 60 best of breed software companies and stitched them together quite effectively under the Oracle brand.

After buying applications, data management, and middleware companies, Sun is, in a way, more of the same.  And, it is not surprising that the new tag line is, “Hardware. Software. Complete.”  It is interesting, though, that in both the tag line and the accompanying logos, hardware and Sun come first, respectively.

As for the hardware angle, specifically, Larry has always loved software but has also always had a little hardware on the side; remember nCube, Liberate, Pillar and others.  So, nobody should have been surprised when he declared his intentions to keep and invest in the Sun hardware business, rather than sell it off as assumed by many cynics and wags.

From the perspective of Oracle and many of its largest customers, a holistic product offering comprising all types of software, networking and (why not?) hardware makes perfect sense.  In short, what Apple is to the consumer, Oracle aims to be to the enterprise.

The Competitive Landscape

But, Oracle has rivals in this quest for IT domination and, no, despite the unctuous outcry of the open source faithful, MySQL was not one of them.  Nor is Oracle likely to be too concerned about HP, Dell, or other of Sun’s most direct competitors that it is now inheriting as its own.  Extant hardware rivalry notwithstanding, they need Oracle more than it needs them.  And anybody who posits a coming battle between Oracle and Google is going to be waiting a very long time for that bell to ring, if it ever does.

If Larry had a whiteboard in his office, if would clash with the Ming Dynasty pottery and the rest of the billionaire’s bricolage there.  But, if he had one, written on it, probably with the indelible markers you’re not supposed to use on whiteboards, would be three names: IBM, Microsoft and Cisco.  And, with one acquisition, albeit more difficult and painful than anticipated, Oracle has gained considerable leverage on all three of them.

IBM

It will take a lot of luck and sweat for Oracle to match wits with the hardware R&D folks at IBM, no question, but Oracle is tenacious, nimble, and has a knack for picking the right problems to solve.  Although it will probably never beat IBM at the hardware game, it is in a good position to gouge out their forward looking sweet spots, like cloud infrastructure, media, web and transaction servers, and other places where Sun and Oracle were already partnering to a good competitive effect.

And, on the software side, IBM has come a long way from its “Tanya in the closet” days of being a captive subordinate to the hardware business, becoming a pure play software leader with no asterisks next to their name.  Oracle may have bought 60 software companies, but IBM bought 80 and did just as good a job assimilating them.  But, with the Sun purchase, Oracle has filled a lot of holes in its middleware assortment where IBM has had an edge, and Solaris has made it the master of its operating system domain.

If IBM loses the Linux case to SCO, which is much less of a long shot than it was a year ago, Oracle will gain a huge opportunity in the systems arena, in part because they own Solaris, a proprietary Linux alternative, and partly because they are indemnified in using Linux by Sun’s SCOSource license.   IBM could be blocked from selling AIX and Linux by the same injunction unless they write a gargantuan settlement check and even if they do that, chaos will reign for a time and Oracle knows how to exploit chaos to its advantage.

And then there is Java.  Sun may have open sourced the Java language in 2006, but it retained the copyright and veto power over anything the Java community does, and now Oracle owns those rights.  As probably the most active and heavily invested member of the Java community, probably even more so than Sun itself, having spent many hundreds of millions of dollars fostering Java’s adoption and using it in their products and service practices, IBM has a lot to lose if Oracle decides to use its power over Java differently than the egalitarian approach sworn in blood by Sun.

And why wouldn’t they?  As a number of open source proponents have been quick to point out, the Java community is very large and Oracle has to care some about their good will.  But, besides IBM, many of the other big Java players are either companies Oracle has already bought or are competitors Oracle would love to crush.   Oracle can do whatever it wants with Java and it can veto everything IBM and other rivals want to do with it, and it doesn’t follow that doing so will hurt or even bother the independent developers who make up much of the community.  It is unlikely that Oracle will ever hurt IBM as much as it might like to, but it can certainly give them more trouble than any other company ever has.

Microsoft

Microsoft has a lot more to worry about than IBM does, though.   Already feeling the cuts of a thousand daggers wielded by Adobe, Apple, Google, the EC, various patent holders, and many others, they are now about to taste the cruel steel of a seven billion dollar samurai sword wielded by a sensai with a grudge, and they won’t know what hit them.   Operating systems, servers, middleware, programming tools, and networking are all categories where it was well known that Sun’s products are original and highly competitive but their marketing has been derivative and highly inept.  Add to that list the less original, less technically exceptional, and no better marketed, but nonetheless exceedingly popular MySQL database and StarOffice/OpenOffice desktop applications and there is hardly a Microsoft revenue stream besides gaming and search that is not now threatened by Oracle.

The protracted arc of the European Commission’s deliberation on the acquisition, was marked by manifest speculation and questions about why Oracle wanted MySQL and what they would with or to it.  The answer is simple: they want to use it to kill Microsoft SQL Server.  The Oracle database has actually been available in a largely comparable, competitive form to SQL Server for quite some time, but that fact was lost in the shadow cast by the universal perception that Oracle was an expensive, high-end database.  But, everybody knows that MySQL is free.  And, while everyone has been speculating about MySQL and other parts of the Sun portfolio, StarOffice has been largely overlooked.  But, it is easy to imagine that Oracle will cherish this asset and use it far more effectively against Microsoft than Sun ever did.  In Sun’s hands, people hardly even knew about it, let alone that it was virtually free.  They will now.

Cisco

And, finally, there is the dark horse named Cisco.   Having recently declared their intentions to take the field of corporate IT by other means, imbuing their network switches with the ability to run applications, store data, and do all the other things that networked servers do, they have (ironically) promised to make good on Sun’s largely unrealized dream, “the network is the computer”.  And, they have also painted a day-glo target on their backs for Oracle to now start shooting at.

Cisco has actually been trying for quite a few years to make their switches smarter with the indigenous IOS software initiative, but to little avail.  What has changed, though, is that Cisco has discovered the value of partnerships – with Intel, EMC, VMware and others – and it has come to believe in the marketing power of touchy-feely advertising and a value proposition rooted in saving the planet.

All of that is very nice, but, at the moment Cisco is still mostly in the business of getting bits from here to there, not in transaction processing, business intelligence, applications enabling, or any of the other things that make the IT world go ’round.  Meanwhile, in addition to already having all that stuff, Oracle now also has a whole lot of good networking technology that it didn’t have two weeks ago, and they have one more thing.   They have a deep understanding of the psychology of the CIO.   Cisco doesn’t.

Oracle knows that IT is a macho business where success and power are measured by how many servers, ports, connections, MIPS, terabytes, transactions per second, and square feet of raised floor one has in one’s data center.  It is hard to guess who is the target of Cisco’s current TV commercials, featuring twenty-something actress Ellen Page playing herself in a series of down-home vignettes and ending with a casual, lilting, fashion modelesque voice-over talking about the “human network” and the “community” theme which is also central to the high profile “Urban Connected Development” and “Planetary Skin” initiatives prominent elsewhere in the company’s marketing.

These are not messages that most CIOs are likely to find nearly as resonant or actionable as Oracle’s dry, direct promise that it will enable them to “lower IT cost and deliver a higher quality of service”.   Cisco is more likely to eventually become Oracle’s road kill, or its biggest acquisition target ever, than it is to become a competitor of any consequence.

Conclusion

In summary, Oracle’s purchase of Sun Microsystems gives them an incredibly broad assortment of benefits, including revenue, customers, products, corporate mass, and other market advantages that will allow them to play an ever more substantial role in shaping and leading the information technology industry.  But abstractions like leadership and popularity have never been nearly as important to Oracle as winning.  To Larry Ellison and his talented team of stone cold killers, business is a zero sum game; for Oracle to win, other companies must lose.   They have always felt this way, but now they are in a position of new potency where they can use the bounteous booty of Sun to win against the triumvirate of untouchables as never before.