Sunday, October 11, 2009

Sun Founder Says Customers Should Embrace Oracle

. Sunday, October 11, 2009

By stockOzone team

Customers of Sun Microsystems Inc. (JAVA), shouldn't fear the pending acquisition by Oracle Corp. (ORCL), Sun's founder and Chairman, Scott McNealy, said Sunday.

Speaking at the start of an Oracle user conference in San Francisco, McNealy and Oracle's Chief Executive Larry Ellison, set out to reassure both Sun's and Oracle's customers that database giant Oracle had committed to investing in most of Sun's key technologies after the $7.4 million acquisition closes, and that the deal would enhance both companies' technologies.

The presentation by McNealy, which kicked off the conference, is a sign of the importance for Oracle in communicating with Sun customers. It comes amid growing uncertainty over the deal among customers, partners and investors amid an antitrust probe into the deal, and as Sun loses customers to rivals.

McNealy name-checked in particular technologies such as Sun's Sparc processor technology, its Solaris operating system, Java, a computer language which is part of the plumbing of the Internet, and Sun's MySQL open source database.

"The question is, as we head into a new chapter, will this innovation continue? The first thing everyone asks is what will happen with Sparc?" McNealy said.

"We went and asked Oracle and Oracle is committed: they're going to spend more money developing Sparc than Sun does now. That's a good sign."

McNealy made similar assurances about other key Sun technologies.

The Sun acquisition is expected to take center stage at Oracle's Openworld event, which takes place over the course of five days and is attended by customers and partners from around the world. While Oracle's core audience at the event is the large corporate customers who buy its databases and business software, the Redwood City, Calif.-based company will also want to reassure Sun's customers about the future under Oracle ownership.

Oracle agreed to acquire Santa Clara, Calif.-based Sun in April. But the deal's closure has been hampered by an ongoing probe by European Union antitrust regulators. EU officials recently triggered a more in-depth investigation into the deal, citing "serious concerns" about the impact the deal could have on the database market. Ellison previously told an audience of Silicon Valley executives recently the delay was costing Sun around $100 million a month. Meanwhile, Sun has continued to lose market share in the server market as customers like International Business Machines Corp. (IBM) and Hewlett-Packard Co. (HPQ) have sought to capitalize on the enforced delay to lure its customers away.

Ellison Sunday reiterated that Oracle, in spite of speculation to the contrary, is committed to the hardware business it will acquire when it buys Sun and will sell "no part" of the business.

Ellison also took several sideswipes at rival IBM, which he said had been telling customers Oracle would divest Sun's business. Oracle said that the combination of Sun's hardware and the Oracle database was faster and more reliable than similar products from IBM. He said Oracle would take out advertisements offering to pay $10 million to any organization which found that the combination of Oracle and Sun didn't run at least twice as fast as an alternative.

Notwithstanding the regulatory challenge, Ellison and Oracle executives hope to build momentum around the Sun deal at the event, and increase the visibility of Sun's products among Oracle's customers.

High-profile Sun executives and technologists, including John Fowler, a senior server executive, and James Gosling, who created the original design for Java, discussed the benefits of running Oracle's software on Sun's operating systems and processors.

Disclosure: Author does not own any of the stocks discussed here.

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