ORACLE ACQUIRES SUN MICROSYSTEM
Oracle's clearly a big shopoholic. Over the past few years, it swallowed People-Soft, Siebel Systems, JD Edwards, India's i-flex and BEA
Systems. And now Larry Ellison is all set to cut a cheque of $7.4 billion to pocket Sun Microsystems
Clearly, Ellison is trying to make his company Oracle a global software superpower. And embarking on "binge shopping'' is one of the ways to hit that ultimate goal, say analysts.
For Oracle, one way to grab the market of its arch rival Microsoft in core segments like operating systems and browsers is by getting into powerful operating systems. Acquiring or developing such products can be extremely expensive and time consuming. Competing with Microsoft's well entrenched infrastructure products will also be a tough proposition.
A few years ago Oracle had got into selling massive integrated packages, rather than selling products in bits and pieces, through acquiring the banking technology solutions provider i-flex solutions.
In January 2008, Oracle acquired BEA Systems for $8.5 billion, to strengthen its Fusion middleware software suite and also deepen its footprint in the Asian markets.
Now with Sun, Oracle, which is best known for databases and middleware, will have a complete infrastructure stack. "The acquisition will complete the Oracle story by improving its market competitiveness. Both the companies have strong presence in telecom and banking and these verticals account for 40% of the revenue of the industry,'' said Kapil Dev Singh, country head of technology research firm IDC India.
K K Raman, executive director for IT in KPMG, said, "With a spectrum of capabilities, software, hardware, applications and services, Oracle will now be able to satisfy the entire value chain of customers. It's gaining monolithic strength in the marketplace. Since both firms are already present independently in India, the deal will not have disturb the landscape.''
The deal is seen to be a win-win for the companies. "With a wide portfolio of software (ERP, CRM, SCM, business intelligence), hardware (servers & storage) and services, the combined entity could give a tough time to IBM and HP," said a Dataquest analyst.
Strong domination in verticals like retail and telecom (Oracle) and BPO and BFSI (Sun) can make the combined entity even more formidable in the market, especially in addressing the emerging SME opportunity, he added. Dataquest estimates that in fiscal 2007-08, Oracle posted revenues of Rs 5,800 crore in India, while Sun Microsystems recorded Rs 1,674 crore. Oracle has 24,000 people in India, while Sun has 1,200.
Analysts say the market may not immediately see Oracle and Microsoft locking horns. They are leaders in infrastructure software and application spaces respectively and as of now they are not going to take each other head on. But it's clear that Ellison wants to put Oracle right on top of the tech ladder.
Systems. And now Larry Ellison is all set to cut a cheque of $7.4 billion to pocket Sun Microsystems
Clearly, Ellison is trying to make his company Oracle a global software superpower. And embarking on "binge shopping'' is one of the ways to hit that ultimate goal, say analysts.
For Oracle, one way to grab the market of its arch rival Microsoft in core segments like operating systems and browsers is by getting into powerful operating systems. Acquiring or developing such products can be extremely expensive and time consuming. Competing with Microsoft's well entrenched infrastructure products will also be a tough proposition.
A few years ago Oracle had got into selling massive integrated packages, rather than selling products in bits and pieces, through acquiring the banking technology solutions provider i-flex solutions.
In January 2008, Oracle acquired BEA Systems for $8.5 billion, to strengthen its Fusion middleware software suite and also deepen its footprint in the Asian markets.
Now with Sun, Oracle, which is best known for databases and middleware, will have a complete infrastructure stack. "The acquisition will complete the Oracle story by improving its market competitiveness. Both the companies have strong presence in telecom and banking and these verticals account for 40% of the revenue of the industry,'' said Kapil Dev Singh, country head of technology research firm IDC India.
K K Raman, executive director for IT in KPMG, said, "With a spectrum of capabilities, software, hardware, applications and services, Oracle will now be able to satisfy the entire value chain of customers. It's gaining monolithic strength in the marketplace. Since both firms are already present independently in India, the deal will not have disturb the landscape.''
The deal is seen to be a win-win for the companies. "With a wide portfolio of software (ERP, CRM, SCM, business intelligence), hardware (servers & storage) and services, the combined entity could give a tough time to IBM and HP," said a Dataquest analyst.
Strong domination in verticals like retail and telecom (Oracle) and BPO and BFSI (Sun) can make the combined entity even more formidable in the market, especially in addressing the emerging SME opportunity, he added. Dataquest estimates that in fiscal 2007-08, Oracle posted revenues of Rs 5,800 crore in India, while Sun Microsystems recorded Rs 1,674 crore. Oracle has 24,000 people in India, while Sun has 1,200.
Analysts say the market may not immediately see Oracle and Microsoft locking horns. They are leaders in infrastructure software and application spaces respectively and as of now they are not going to take each other head on. But it's clear that Ellison wants to put Oracle right on top of the tech ladder.
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