Tuesday, 21 April 2009

SUN set or SUN rise for SUN Microsystems

Due to the media speculation about IBM acquiring Sun Microsystems many crystal ball gazers were surprised (even if they don't admit it) when it was announced that Oracle will acquire Sun later this summer. Oracle have agreed to pay $7.4B at $9.40 for each share which when subtract the cash and money owed to Sun means a true acquisition price of $5.6B. Enough money to bail out a few banks!

Many analysts said that Sun would fail to find another buyer after talks with IBM broke down. Then within days they were proved wrong. A few raised eyebrows at first as Oracle were not commonly predicted and then some nods of approval as the synergy was realised. Sun's Solaris operating system is the leading platform for Oracles database software. Sun also makes "middleware," which allows business computing applications to work together. Oracle's middleware is built on Sun's Java language and software, so there is a fit but many elements of Sun and Oracle’s businesses are quite different from each other.

Outside of IT the mergers and acquisitions the trend has been for large conglomerates to split up their products and services. To spin them off or sell so that they can focus upon their "core competencies" on the whole this has been reasonably successful. However, within IT the trend seems to moving generally the other way.

However, can the same management make a success of the future? Is this a rising or setting sun we see before us?

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