Oracle to acquire Sun Micro for $5.6B
Oracle will buy Sun Microsystems for $5.6 billion after IBM failed to secure a deal with the software company (story here). The acquisition will give Oracle “the most important software” it has ever obtained: Java and Solaris.
The deal is valued by Oracle at $7.4 billion, including Sun Microsystems’ cash and debts. Sun’s Solaris operating system (OS) is the leading platform for Oracle’s database business, the company’s largest segment. The company already uses Java as the basis for its Fusion Middleware business.
The acquisition was unanimously approved. Talks between Sun and IBM fell apart earlier this month, reportedly on divisions within Sun’s board of directors (story here).
The acquisition will make Oracle a stronger competitor against rival IBM. “Over the past year, Oracle has been gobbling up all these other companies and has really become a full-service technology company,” says Michael Morgan, industry analyst for mobile devices at ABI Research. “Now, Oracle has a system that makes it look very similar to IBM.”
Sun Microsystems’ Java software is one of the most widely deployed computer programming languages, with the Java Mobile Edition being a cornerstone language in many feature phones.
Despite the software’s place within the mobile software market, the acquisition is unlikely to have near-term implications for mobile operating systems.
“You’re not going to see an immediate change in the Java ME space or in the business as a whole,” Morgan says. “A lot of handsets use Java technology, and it’s now in Oracle’s hands. This could change things, but at this point for Oracle, it is more about getting access to servers.”
This was not the case when IBM was in acquisition talks with Sun (story here). A Sun/IBM deal would have had a major ripple effect for mobile operating systems by expediting the creation of a Java-based mobile operating system.
A Java-based mobile OS would eliminate the need for an abstraction layer between the real-time operating system and Java-based applications, ultimately improving application performance and making it attractive to developers.
The last Java-based OS, SavaJe, went defunct after it failed to secure backing from a major OEM. SavaJe’s intellectual property rights were acquired by Sun Microsystems in 2007.