Oracle buys Sun

April 20, 2009 8:37 AM EDT

No wonder Sun had the audacity to up their price to IBM at the last minute.

Oracle just bought Sun for $7.4 billion. Today the two companies released the following joint communique:

'The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,' Oracle's chief executive Larry Ellison said in the statement.

'Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves,' he said.

This means Oracle is now a hardware maker. And a OS vendor. And a chip builder.

Oracle President Safra Catz said in a statement:

We expect this acquisition to be accretive to Oracle's earnings by at least 15 cents on a non-GAAP basis in the first full year after closing. We estimate that the acquired business will contribute over $1.5 billion to Oracle's non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined.

On the surface it does seem like a good fit. Oracle has been fiddling around with their own brand of Linux for awhile and this acquisition seals their OS ambitions but it comes with a lot of additional "baggage".

It will be interesting to see how Oracle deals with its Red Hat and SUSE Enterprise Linux partners in the long run. Will they push Solaris? Hard to say at this point.

Oracle has supported/recommended Solaris for a long time as an OS on which to install their DB. But there are lots of other parts of Sun that it will need to absorb, at least initially.

And in the long run, will Oracle continue to develop Sparc chips and Sun's proprietary hardware? Hardware isn't really Oracle's core competency.

As a side note, it is a bit scary that one company owns two of the biggest types of databases out there, Oracle and MySQL. Only IBM's DB2 and Microsoft's SQL even come close. I wonder if the government feels the same way.

Oh, and Star Office? Now Oracle Office? Does Oracle do Open Source anything?

Oracle buys Sun