Oracle's $7.4-billion offer to buy Java-originator Sun Microsystems re-arranges the enterprise Java landscape, but does not greatly disrupt the status quo, according to users and analysts.
If completed, the deal would give Oracle far more control over Java standards. The company gained much greater prominence in the Java arena just last year, when it closed the purchase of major Java application server maker BEA Systems.
Oracle's move to buy Sun followed reports of a breakdown in merger discussions between Sun and IBM that would have set the price of the struggling systems and software vendor at $6.5 billion.
In a teleconference call announcing the merger, Oracle CEO Larry Ellison described the Sun Java programming environment as among elements "instrumental in Oracle's decision to acquire Sun." Ellison noted Oracle's Fusion middleware is based entirely upon Sun's Java language and Java software.
"The combined Oracle and Sun will be a systems and software power house," claimed Jonathan Schwartz, Sun's CEO.
For embattled Sun, which has struggled financially in recent years, the outcome is seen as positive. "I think this is about the best outcome Sun could hope for at this point in the game," said Dana Gardner, principal analyst, Interarbor Solutions. Gardner suggests that Java stewardship is now in stronger hands.
For his part, Oracle's Ellison pledged that the acquisition would increase investment in Java technology.
Oracle-Sun deal seen addressing Java viability issues
"If I am a Java shop, I should not be too worried," said Gardner. "Any viability issues around Java are now gone."
Although he questions Oracle's history of standards' stewardship, Gardner sees a détente of sorts emerging.
"Oracle has a long history. The company is a tough competitor. I do not think we have seen them as a steward of standards in the past," he said. Gardner indicated Sun's Java standards' leadership has been counterbalanced by IBM's Java market role.
"Sun was a good steward of Java because IBM had so much clout in the real world. That is not going to change. IBM is still there to play cop," said Gardner.
Jeff Genender, author, consultant and Apache Project committer, sees a more competitive Java space with Sun in the Oracle portfolio.
"Sun has been an independent entity," said Genender. "Its going to Oracle might be a bit more positive than its going to IBM."
"Oracle with Sun would give IBM competition in more than just the Java space," he said. "This will breed competition between the mega behemoths."
If completed, the transaction would appear to vault Oracle into the computer hardware market, one that it has patently avoided during its history.
Oracle began to pursue an intense acquisitions strategy with its January 2005 take-over of PeopleSoft. The trend steadily continued, as Oracle garnered Siebel in 2006 and BEA Systems in January 2008. The harvest has included over thirty other companies in the past four years. In October, Oracle acquired Primavera, a maker of project management software.
The present deal was approved by Sun's board of directors. In a statement, Sun said it expected the deal to close this summer, subject to Sun stockholder approval, regulatory approvals and customary closing conditions.
[Includes reporting by George Lawton and Lauren Kelly.]