Oracle Corporation is to buy Sun Microsystems for $9.50 a share in a deal valued at approximately $7.4 billion, just a few weeks after a deal by IBM to buy Sun fell apart. It looks like Oracle will pay a premium of $2.81 a share, or 42%, over Sun Micro’s closing price of $6.69 a share on Friday.
Oracle said the deal is valued at $5.6 billion excluding cash and debt. Oracle is calling Sun’s Java “the most important software” it has ever acquired. The deal, which is expected to close in the Summer and was unanimously approved by Sun’s board of directors, has massive implications for the future openness of Java and MySQL.
As the NY Times points out, Oracle and Sun are two heavyweights that have been partners for more than 20 years, even if Oracle has been distancing itself a bit from Sun’s server line in favor of competitors like HP and Dell lately because of Sun’s business decline. As a result of this deal, Oracle will now become a behemoth in both the software and the hardware market, and the implications this acquisition will have on the its closest rivals and the market in general will be noticable for years to come.
The official release, with emphasis ours:
Oracle to Buy Sun
SANTA CLARA, Calif. April 20, 2009 Sun Microsystems (NASDAQ: JAVA) and Oracle Corporation (NASDAQ: ORCL) announced today they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt.
“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,” said Oracle President Safra Catz.
“The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,” said Oracle CEO Larry Ellison. “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. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.”
There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industry’s best-known brands and most widely deployed technologies, and it is the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracle’s fastest growing business, is built on top of Sun’s Java language and software. Oracle can now ensure continued innovation and investment in Java technology for the benefit of customers and the Java community.
The Sun Solaris operating system is the leading platform for the Oracle database, Oracle’s largest business, and has been for a long time. With the acquisition of Sun, Oracle can optimize the Oracle database for some of the unique, high-end features of Solaris. Oracle is as committed as ever to Linux and other open platforms and will continue to support and enhance our strong industry partnerships.
“Oracle and Sun have been industry pioneers and close partners for more than 20 years,” said Sun Chairman Scott McNealy. “This combination is a natural evolution of our relationship and will be an industry-defining event.”
“This is a fantastic day for Sun’s customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace,” said Jonathan Schwartz, Sun’s CEO, “From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system and Sun’s SPARC and x64 systems. Together with Oracle, we’ll drive the innovation pipeline to create compelling value to our customer base and the marketplace.”
“Sun is a pioneer in enterprise computing, and this combination recognizes the innovation and customer success the company has achieved. Our largest customers have been asking us to step up to a broader role to reduce complexity, risk and cost by delivering a highly optimized stack based on standards,” said Oracle President Charles Phillips. “This transaction will preserve and enhance investments made by our customers, while we continue to work with our partners to provide customers with choice.”
The Board of Directors of Sun Microsystems has unanimously approved the transaction. It is anticipated to close this summer, subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.
There will be a conference call today to discuss the transaction at 5:30 a.m. Pacific time. Investors can listen to the conference call by dialing (719) 234-7870, passcode 923645. A replay will be available for 24 hours after the call ends at (719) 884-8882, passcode: 923645. A live audio webcast of the call will be made available at www.oracle.com/investor and a replay will be available for seven days after the call ends.
About Oracle
Oracle (NASDAQ: ORCL) is the world’s largest enterprise software company. For more information about Oracle, please visit our Web site at http://www.oracle.com.
About Sun Microsystems, Inc.Sun Microsystems develops the technologies that power the global marketplace. Guided by a singular vision — “The Network is the Computer” — Sun drives network participation through shared innovation, community development and open source leadership. Sun can be found in more than 100 countries and on the Web at http://sun.com.
Holding my hat really tight!!! Tell us, is this a rumor or truth???
I just received an email from Jonathan Schwarz to allsun. So I would say pretty much truth.
Horrible news for the future of mysql! I hope they block this in Europe or force oracle to breakout the mysql unit.
There are actually already many mysql forks out there. The most famous one is Drizzle
The world isn’t ending. There’s a reason those opensource licenses are called what they are. You should read them once in a while.
Monty knows the value of open source software – a billion bucks or more! So also many other rock star programmers. There are people and there are companies that cannot thrive without a free/cheap fast db of that quality. Jon’s blog highlighted that throughout last 12-18 months. So Larry is not going to butcher his potential market – that’s like shooing your customer away on day 1. He can’t do that. He’ll start slowly, after 3 months, maybe 6. By then, we’ll already have either an official open source Oracle-sponsored branch or a community-driven database equally good or better. With more players in the market you might see better variety and innovation.
Oracle will have to sorrow much if it does what it did to Peoplesoft. Larry is too wise (not cunning/intelligent, just wise) to butcher Oracle’s image in this day and age. He can see the world has changed. He just needs to be in this race too – it’s too big to miss.
As for SUN, well, I don’t really know what got into them to allow this despite the fact that they have always had even engineers who could do business better. Austerity looks very cool, but this is funny. Someday, I hope, we’ll all know what actually went on behind the closed doors.
It’s not just two options – either Oracle burying SUN or SUN transforming Oracle from an open source point of view. I think what will happen is something in between – some money, some goodies, some deals and some freebies. Oh, by the way, you can’t violate the GPL, thank the FSF for that.
You have to hand it to Ellison. He doesn’t let the idiotic lawyers run Oracle.
IBM and the baby bells should take notes. The fucking lawyers don’t run the fucking company.
There must be some pissed off executives at IBM because the lawyers couldn’t get their hats on straight. I hope they get fired.
This indeed is truth. It has already been posted on Bloomberg as well http://www.bloo...&refer=home
Well besides the hardware aspect I see another important connotation to this now. The database market on the Web is again now a war between the 2 Giants Microsoft and Oracle. mySQL (a Sun Software now) seemed to be doing extremely well on the Web and it is a 2 horse race again between Microsoft and Oracle. It will be interesting to see the fate of mySQL vis-a-vis Oracle Database
Really breaking news! Definitely a new change is about to happen with regard to mySQL and Oracle Database
sorry to be clueless, but how does this affect mysql?
nevermind, i didn’t know sun had bought mysql ab
does this mean more layoffs?
WorkerLocator.com – human sacrafice
The airs of SUN acquisition are running very fast from the corridors of IBM to Oracle. WoW!
How much usd it’s extra from ibm deal?
10 cent more per share, Sun ask IBM for $10 per share, but from NYTimes said IBM offer $9.40
It is already in both Sun’s and Oracle’s websites … so definitely true
O yes! I did see that. http://www.orac.../sun/index.html http://www.sun....-0420/index.jsp.
So Java got a new home?
My lead programmer asked me recently should we port or application to C++, now i think I will take him up on that idea.
I just can’t see Oracle keeping Java open the way it is.
Hope Java and MySQL survive and remain open. MySQL has been the backbone for many of my projects… I never liked Oracle.
Java is already open. Oracle cannot take it back completely. The worst case scenario is that we see one or more forks; however, I see this as unlikely. In fact, Oracle is more likely to finish opening up Java than Sun was.
My lead programmer asked me recently should we port or application to C++, now i think I will take him up on that idea.
Then both of you should be fired for being clueless.
@BlogReader
When you find my boss tell him that then.
BlogReader = Oracle or Sun Employee (possibly boss)
Give your real credentials in your link and stop being a coward.
I think you should leave your religious predilections at the mosque, this is a place to discuss technology.
Yes, ckecked other sources just now. Looks like we’re in for another big acquisition in the web world.
sorry if i’m clueless again, are either sun or oracle ‘web companies’?
Sun owns Java, MySQL and JavaFX. Those three properties make it a web company of sorts.
Interesting… wonder what they will do with (to?) MySQL?
http://www.orac...y-db/index.html
looks like they were waiting for the stock price to go down
It’s true – Press release and all.
Weirdly no mention of the fate of MySQL.
I think we should all be _very_ worried.
my thought exactly. Great move by Oracle – kill mySQL.
Looks like ProgreSQL will be getting a lot of fresh looks from people like me!
Guess its time for us to switch to Amazon’s SDB. Say goodbye to MySQL.
I don’t think this will mean the end of MySQL. Oracle is smarter than that. The worlds most used database won’t just disappear because they own it. I imagine they will do a better job of marketing it.
Dont think they will kill mysql. That is just inviting a huge backlash from a well established community.
I don’t understand why everyone thinks Oracle is going to killl MySQL. No way. MySQL complements Oracle too well. They now have control of a full range of database products from Berkeley to MySQL to full Oracle.
It would be ridiculous for Oracle to kill that. They’re going to integrate those products and make it simple for people to start cheap on MySQL and then migrate into the more expense database later. MySQL will likely get much better care under Oracle than it ever did under Sun.
my comment was more of “kill the competition” of mySQL, not necessarily discontinue the product. You can kill the free competition by neglecting it.
You are correct, that their likely path will be to give [an appearance of] much better care for mySQL, in order to avoid a backlash. But you can also bet that mySQL will never again “compete” with Oracle because it’s better for Oracle’s bottom line for them to appear cooperative – with a wide product line (which, of course, the EXPENSIVE Oracle always makes just a little more sense than the free or cheap mySQL).
Anyone who is currently using mySQL in the enterprise would be wise now to begin throwing their support and dollars to alternatives, just to keep Oracle in check. Otherwise you get another dominance similar to Microsoft in the OS market, and the accompanying lack of innovation.
>> MySQL will likely get much better care under Oracle than it ever did under Sun.
Based on what? I would like to know one product that Oracle has purchased that got better afterward. Weblogic? Nope. JRocket? Nope. Coherence? Nope.
Quite frankly you have to have serious mental problems if this news does not make you want to take the elevator to the top floor of your building and jump out of the fucking window.
Every Oracle product is crap, they are monstrously evil, and Larry Ellison is the High Priest of Satan.
Oracle will destroy Java and MySQL, not to mention, glassfish, solaris, ZFS, etc. This is going to set back the progress of the human species decades if not hundreds of years. This is the worst calamity that has befallen the species since the Roosevelt administration. It’s certainly the worst thing to ever happen to the IT industry.
This is a full-scale catastrophe. RIP Java. It was fun while it lasted. Don’t come looking for me. I will be drinking myself to death.
Official press release of the Oracle-Sun deal here:
http://tinyurl.com/djqws7
Oracle is an enterprise company so I doubt they will do much with MySQL. They will most likely sell the hardware business. The tape drive business was the problem for IBM from a regulatory standpoint. Oracle gets JAVA, they can sell the HW to Fujitsu. Oracle will never be truly OPEN however, since their SW is their franchise. Sun could not command a premium any longer in the minds of CIOs.
Wow. Soup-to-nuts (hw + sw) enterprise platform from a single vendor. Great move Oracle – obvious if you think about it.
Good for Oracle. That’s what you get IBM — you shouldn’t have tried to be such a tightwad even in this economy. Someone is always gonna buy you or what you offer (well, unless you’re Yahoo
It is official Mike, please update.
http://www.sun....-0420/index.jsp
I don’t know what this means but I think I want to weep.
So it is real after all, not April Fool.
http://www.sun....racle/index.jsp
SANTA CLARA, Calif., April 20, 2009 — Sun Microsystems (NASDAQ: JAVA) and Oracle Corporation (NASDAQ: ORCL) announced today they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt.
shit….I also thinking like to weep…I don’t know what they will do with MySql….will it be open-source ??? I doubt now…..
MySQL is under the GPL and the code that’s been released will _always_ be under the GPL. They could potentially make newer releases closed source, but I seriously doubt it. The didn’t do so for BerkeleyDB.
More likely, Oracle is going to put a lot of support behind MySQL. They’ll want companies to start with the cheaper, open source database and then seamlessly migrate to full enterprisey Oracle later.
This is scary. Oracle will kill MySQL.
I am saddened by this news. I can’t imagine it being positive for Java or MySQL.
Wow this is really scary if java and mysql are not open source any more…
I don’t think Oracle will kill MySQL. In fact, Oracle may use MySQL to cannibalize MS SQL Server from below.
the question is whether or not MySQL will remain free…
what will happen to MYSQL???!!! no mention what so ever in the press release: http://bit.ly/XvYuL
I don’t think think this means that Oracle will kill mysql. In fact if you think about it Oracle has made a great strategic move.
Oracle is huge in the enterprise market which mysql pretty much owns the database market on the web.
Agreed. Oracle already owns InnoDB, which is part of MySQL anyway. They started down the Web database path three years ago…
Larry is the King of M&A see the News for jobs http://tinyurl.com/ysr5cd
Congrats – BIG DEAL
I can’t find a positive in this. Either they dump everything by running it into the ground, or they add the technologies to their current monstrosity of a mess of other bought up software. Seriously, there is nothing elegant about using ANYTHING that comes from Oracle.
I am not feeling well after reading this. I dont know why?
Is it some personal stuff for me now that I am using Java for my open source flavor.
This is bullshit SUN started with IBM and ends up with Oracle.
Oracle has nasty habit to eat companies like this.
I think this will bring good news. Leaving aside this particular deal, which is outside of my real expertise, deals of this size will encourage the oil rich countries to invest in buying our businesses before they all get snapped up. This should get the flow of oil revenues flowing back towards the developed nations, freeing up the capital markets. Stock markets to bottom out this summer, with a little luck.
I think it is very strategic buying decision..
Really? You’re sure they didn’t just flip a coin?
test
Hold on to your hats is right. Sun employees, hold them out in front of you, upside down, with a little sign asking for spare change while you slum it on the street, unemployed.
Why did they have to sell? They’ve note done nearly as well as a decade ago, but other than the past twelve months they have largely always been profitable. There is no reason not to continue other than the idiocy of wrapping your business around wallstreet instead of just simply having a good business. Sounds like Jonothan and gang just waned to GTFO. Now they can have some sweet bonuses (they Schwartz was already the 12th highest paid CEO I believe) and go retire on a beach. Or go find another solid company and run it into the ground.
You are kidding – right ? With a plausible offer of twice the market price for a publicly traded company, the officers are obliged to take it seriously. Thats how capitalism works.
Sure, if it was seriously damaged outside of the current economic downturn. Not like it was a totally destroyed company that needed a firesale.
>> Sounds like Jonothan and gang just waned to GTFO.
I think that pretty much sums it up.
Sounds a good strategic step to me too…
It’s more touch-and-go in the app-server market (what Oracle likes to call ‘middleware’) which is already suffering a little from Oracle’s transition over to BEA Weblogic from its older products. Sun has excellent products in that area, i.e. Glassfish. I have used all of these products (plus Websphere and JBoss) and Glassfish is easily the nicest (in fact I would say it’s the best app-server I’ve used, apart from plain old Tomcat).
Also, IDEs. Although I use Eclipse, I have to say that Netbeans is heaps better than JDeveloper – and Oracle is pretty wedded to JDeveloper.
Commenter Jason above it right about Oracle’s tendency to make extremely inelegant software solutions.
Are there any anti-trust issues here?
I am also wondering about anti-trust issues related to Java, and MySQL.
In coming days, It will be hard to trust any opensource software owned by a company.
Hope, the opensource community like Apache takes the charge of JAVA and MySQL. Just rename them, in case they are trademarks.
my god….
sorry guys. but it’s obvious that a number of (most) of the replies here have no real substantive/deep technical background or understanding of technilogy.
here’s the deal. regarding mysql. it’s open source. while oracal could/might decide to no longer support current or future development, the current latest build is open source, and anyone can get it, and continue to build on it. you can fork the hell out of it, and even release your own future versions. go for it.. so what i’m basically saying is that you can’t “un-open source it”!!
be that as it may, this isn’t a big earth shattering deal. and it’s nothing to “weep/cry” over…
it’s simply the darwinian process continuing. welcome to the real world.
you don’t generate enough cash, you die/get eaten..
peace…
Only thoughtful comment in this post. Thanks!
This also adds an OS to the Oracle stack. This is going to be interesting!
There is only one reason for Oracle to buy Sun. To kill MySQL. That’s it.
So breaking new! My analysis on this(in Chinese): http://www.yunt...om/blogs/27801/
implications for mysql and java? really? oracle seems to have its fingers in a lot of open source pies:
http://www.orac...urce/index.html
looks like innodb is one of them…wait thats a MySQL engine!
JSF … supported by oracle.
implications…my ass
This will have implications in many fields. Not only for databases. But Oracle is unfamiliar with hardware and now they apparently are selling SUN servers. And also the great desktop virtualizations product virtualbox is something that I can’t imagine being developed by Oracle.
In my opinion this will mean in a later stage a big Oracle with possible a couple of small divisions that keep doing there own thing. Or some parts of SUN that will not fit into Oracle will be sold to other companies in there respective field.
WTF? Oracle is unfamiliar with hardware? You’re clueless. They run on everything. They probably know more about hardware than 99% of hardware vendors. Dufus.
So does this mean Java is going to stop tricking people into installing the Yahoo toolbar?
*headdesk*
Newsflash: *Oracle can’t kill MySQL*, even if they want to. MySQL is GPLed. The GPL is irrevocable. The worst they can do is to stall all official development on MySQL, and that’d just mean the community forking it.
In before this comment getting ignored and another 20 “OMG ORACLE R GOIN 2 KILL MYSQL” comments immediately after. Oh well.
shaddap.
u
Now they also own THE German engineering from http://www.virtualbox.org/ which belongs to SUN
This will tie Oracle up for a while. HP and Dell slow down their collaboration with Oracle. They will make many mistakes with MySQL and Java that will drive some away. There will be huge battles in the global field organizations over account control, which will result in mass defections on both sides. This is good news for all Oracle competitors.
Yeah, DB2’s gonna be eating up the business… LOL
Oracle bought the default MySQL DB engine innoDB awhile ago;
http://en.wikip...org/wiki/InnoDB
Now MySQL and innoDB are united. Oracle will do well to leverage the OSS service business model for MySQL.
I wouldn’t worry about MySQL. The anti-trust regulators in the Obama administration will almost certainly require Oracle to either sell off their MySQL holdings to a different company, or more likely spin it off as an independent non-profit not unlike the Linux Foundation.
Hmm.. any idea on what to expect next?
This is really exciting news for the java community. Sun has been neglecting java for years and it is time that a serious company picks up this great technology and gives it the well deserved respect.
Now with the best application servers like WebLogic, the fastest database in the world and top distributed computing with distributed cache technology (coherence) all under the same great management the world will be a better place.
Combine this with the excellent enterprise solutions like supply chain and management and financials, crm, procurement and project management, this company will stand as a paragon of virtues.
Great move Larry.
Hey look, Oracle fanboys DO exist!
“The world will be a better place”
I can feel the hole in the Ozone layer shrinking even as I type!
I hope they will keep investing in OpenOffice.org…
The problem is, there is no longer incentive for MySQL to be developed to press for features/performance to invade Oracle’s market. There is incentive to AVOID this. So whatever they do, it will be kept dumbed down to a level where there is incentive for people to move UP to Oracle. There is definitely a brand new dynamic driving MySQL development, and it is not a direction I like for the long term. For upcoming projects, it makes me want to look very hard at PostgreSQL. This is not good news for MySQL users.
Also, don’t think this purchase was primarily about Java. Oracle has been interested in MySQL’s threat for some time, why else would they have purchased innoDB? I’m sure Java is a very important acquisition for them, but they are a DATABASE company. I hope that MySQL forks very soon and that the open source community, including the corporate sponsored side of it, jumps into endorsing and developing on the fork, very quickly. I am extremely uncomfortable with this.
Yes and no.
MySQL has always been an entry level database. If you wanted a _real_ database, you needed to look to PostgreSQL, Oracle, etc. Unless Oracle actually removes features, then keeping MySQL in its current space isn’t hurting MySQL users.
And there have already been MySQL forks due to Sun’s handling, e.g. Drizzle.
I am not happy…. I work for a financial services company, and while BEA was never good for us, ORACLE has been horrible for us. And now that they own Weblogic, I was doing everything I could to push us to glassfish… but now ORACLE owns that too. What crap.
Oracle now owns OpenOffice as well.
Microsoft are you listenting?
Not Open Office… but StarOffice.
I don’t like this. Yes MySQL is under GPL, but as what Jim McNeely said, now the company behind MySQL has incentives to DUMB DOWN, instead of improve, MySQL.
We just have to wait at see, I guess.