Oracle and Sun to push private cloud solutions

Frost & Sullivan tips IBM- and HP-like Oracle in future after Sun integration

The Oracle and Sun Microsystems road map due to be announced this week by Larry Ellison will likely include moves to forge the pair into a solutions provider in the vein of IBM and HP, according to analyst firm Frost & Sullivan.

After receiving approval from the European Commission for its take over of Sun Microsystems last week, Oracle CEO Ellison was quick to schedule a media briefing to outline his plans for the integration for 9am Wednesday, January 27 (early Thursday morning Australian Eastern Standard Time).

Frost & Sullivan analyst, Andrew Milroy, said the tie up between the two industry giants will consolidate their operations, but also likely push them down the solutions and private cloud path.

"Oracle's license revenue is going down with all the virtualisation that is going on and Sun has been squeezed in the market from virtualisation also from actual machines or servers that are going out," Milroy said.

"What you have got is a solutions provider that is emerging. A company that is going to behave a lot like IBM or HP let's say. I think in terms of Sun specific customers, they are going to be dealing with a different organisation all together. They are going to be dealing with a solutions provider called Oracle that has got capabilities from the application to the disk as Larry Ellison says."

Additionally, while Sun has had a successful run in the education sector in Australia, Milroy forecasts a broader reach with Oracle at the helm.

"What they will want to do is offer private clouds to organisations and get into the overall cloud area with Oracle applications sitting on top of Sun kit," he said. "So I think private cloud seems to be where it is going for a lot of enterprises and that is where they will be looking at. On their own it hammers them both but together they have a good opportunity."

IDC analyst, Matt Oostveen, said Sun will greet the news from the EU commission with "glee".

"On the whole, Sun customers who are committed to the platform should be pleased with the announcement, however questions on the future of the Sun's high end RISC, volume x86 and RISC businesses remain," he said in an emailed response.

"Recent announcements from Oracle tying to allay a jittery Sun installed base should help ease any tension."

Earlier this month, Oracle's Australian representatives remained tightlipped over the impact attempts to acquire Sun Microsystems are having on its operations down under.

IBRS advisor, Dr Kevin McIsaac, told Computerworld at the time the local market is still grappling with uncertainty over the integration and the EU decision delay has slowed sales.

“Sun have not been in great shape for many, many years,” he said. “I was talking to a large client who relies heavily on Sun’s Integration Solution, and they’re really trying to come to grips with what could happen to that particular product if or when the purchase goes through.”

Despite being hit by the economic crisis in early 2009 and dropping head count in the July to September period, including in the Asia-Pacific region, Oracle reported a strong second quarter of its 2010 fiscal year, with earnings of $US0.29 per share, an increase of 15 per cent over the same period last year. Total revenue jumped 4 percent to $US5.9 billion.

Sun's fate, however, has not been as lucky — it has been losing $US100 million a month while it awaits approval for the deal, Oracle chief executive officer, Larry Ellison, said in September.

In October, the future of Australia’s Sun Microsystems staff was left uncertain after the vendor announced it would layoff 3000 employees across its global workforce over 12 months. The cuts were the second for the year, after Sun said it would drop 1500 in March.

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Tags HPOracle-Sun mergerIBMSun Microsystemsprivate cloudcloud computingOracleMergers and acquisitions

More about European CommissionFrost & Sullivan (Aust)Hewlett-Packard AustraliaHPIBM AustraliaIBM AustraliaIBRSIDC AustraliaOracleSun Microsystems

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