Ballmer, IBM Surprised By Oracle-Sun Deal 324
Geon Lasli writes "Reporters caught up with Microsoft CEO Steve Ballmer in Moscow to get his take on Oracle's deal to buy Sun Microsystems for US$7.4 billion. Ballmer was at a loss for words: 'I need to think about it. I am very surprised.'
According to a source, IBM hadn't given up on purchasing Sun and was blindsided by Oracle's move. I guess IBM must be regretting playing tough 2 weeks ago. Unknown to outsiders, Sun had probably found the Oracle lifeboat before they decided to pull the plug on the deal."
No, more like setup man.. (Score:3, Interesting)
It will probably be just like every other merger of companies that should fit well together... it won't.
I would not doubt that IBM left the table after realizing that it was either not worth the money because of culture differences or lack of something to go forward with. IBM didn't need Sun... and I really can't think of why Oracle really needs Sun except to keep IBM from buying it. Actually that is the only logic I can see, prevent someone else from buying it.
Total Package from Oracle and Why MS Didn't Bite (Score:4, Interesting)
Does this give Oracle the ability to offer total package "solutions" to their customers? Do they no longer need to go into a meeting with a potential or existing customer with a preferred hardware vendor at their side to make a co-deal? IMO this gives a lot of power to Oracle and sets up against each other two massive players in the development market.
I'm surprised that Microsoft didn't bid on Sun. I would speculate that they would want Sun for the MySql and Java markets. Had they bid and won they would control a vast proportion of the development market, from Database through to front-end, and over the next release or two of Visual Studio could unify Java and C#. As for the hardware, they could have spun it off to an interested party at an attractive price. IMO since Bill Gates left there's been a vision vacuum and the company is scrambling to find it's path through brute force instead of innovation and this is why they didn't entertain an offer.
Re:I still can't believe it... (Score:5, Interesting)
I'm as surprised as he. I still can't believe it. It won't be real for me until Taco posts the dupe here on /.
I know that was made as a joke, but how can someone who should have their head screwed on as well as Ballmer, at least when it comes to IT business, not have suspected that Oracle would be in play for Sun?
I mean, when I heard the news on the radio the other day, I said to my wife-to-be (yes, true, I have a fiancee; I'm an atypical nerd that has managed to develop a few social skills), "I saw *that* coming." Who else would be big enough to buy Sun, and an appropriate fit? You can count the number of companies in that class on two hands, tops. If Ballmer didn't have his corporate spies working on it, then he's lost his touch.
Or ... maybe it's disinformation from MS.
Oracle buying Sun -- the question is not whether this is a surprise, but why it didn't happen long before now. And, importantly, if the FTC will block it on the grounds that it would create too close to a monopoly in the DB market.
Somebody on the teevee.... (Score:4, Interesting)
...said that it was all about Oracle getting their hands on MySQL to keep IBM from doing so.
I wonder if they're going to turn around and start trying to unload the parts of Sun that they don't want. I look forward to seeing what Robert X. has to say about it.
Re:I still can't believe it... (Score:5, Interesting)
I remember reading either comments or journals about that here that Oracle would be a good fit for buying Sun. So how is that slashdotters, slashdotters FFS!, could see this coming but Balmer couldn't. He should either fire himself or start reading the frontpage. At -1.
Re:Well they've got a lot of nerve (Score:2, Interesting)
"We [Microsoft] don't have a monopoly. We have market share. There's a difference."
"I've never thrown a chair in my life."
"We can believe that we know where the world should go. But unless we're in touch with our customers, our model of the world can diverge from reality. There's no substitute for innovation, of course, but innovation is no substitute for being in touch, either."
"If you look at the dollars, everything about our prices are quite different than classic enterprise software."
"We have no plan in place. We don't expect that to happen."
(All lifted from: http://thinkexist.com/quotes/steve_ballmer/ [thinkexist.com] )
Re:No, more like setup man.. (Score:5, Interesting)
I can think of several reasons why Oracle wants Sun:
1. Oracle is heavily invested in Java, it's future development would be a serious concern for them.
2. Oracle wants the whole stack, from hardware to data. IBM already has it, and Sun way trying to get it when they bought MySQL. Buying Sun gives them a proven, reliable hardware platform and operating system that they've already invested quite a bit into supporting.
3. Oracle needs to expand their product line beyond just the database to continue to grow. There is more growth potential in the rest of the datacenter than there is in database software.
Re:IBM plays hardball? (Score:3, Interesting)
Microsoft could never buy Sun. Buying a Java and Unix vendor would only give them two options:
Keeping the products: I mean, no.
Phasing out the products: That would be a waste of money, as Java would simply find a new leader and Solaris is open-source now, just like Java. Big antitrust issues would arise too.
Re:It's not that surprising (Score:3, Interesting)
But, Sun is a hardware company - many/most of those customers were buying hardware. Oracle is a software company, only interested in the Java/SQL bits.
What are the chances that Oracle will sell off the hardware line? Maybe to Rackable, who seem to be buying up other dead 1990's workstation manufacturers lately....
Re:Is this good? (Score:5, Interesting)
Oracle has always been bullying Microsoft.
Larry Ellison want's to create the world's largest software company and dethrone MS. He's tried everything including support for nettops.
Considering MS gained dominance through an operating system and an office suite, what Ellison did with just a database is quite remarkable.
They have since grown their software portfolio to include enterprise applications, application servers and middleware.
Now with Sun, their getting an OS, a great development platform and a lot of other nice things in addition to the hardware business.
Oracle's revenue after the Sun acquisition should be close to Microsoft's and close to half of IBM and HP's.
Sun was only about a quarter of the size of IBM and HP, it's two biggest competitors and wasn't doing too bad considering who they were up against. And like I said, Oracle wasn't too shabby in the software world.
The combination of the two, if done properly, should really be fierce. Oracle has been buying a lot of companies in the past few years and all reports I've read in the press indicate that Oracle has been handling the mergers very well.
I thought Cisco would have been the ideal buyer for Sun and I didn't even consider Oracle. Now that the merger has been announced and I had time to think about it, I couldn't think of a much better buyer of Sun.
The two companies have so much in common. People that deploy Oracle tend to do it on Solaris/SPARC more than any other platform and that's been the case for a long time. So the companies have had a strong relationship over the years. Not always great, but overall pretty good. The big knock was when Ellison decided to switch developer workstations to Linux from Solaris, which may not have been a good idea since Solaris/SPARC deployments still beat linux deployments for Oracle.
Here you have two CEO's that hate MS, and want to dominate IBM. We're in for some interesting times.
While I don't hate Linux, the linux fanbois on here have been getting on my nerves so let me throw in this barb.
When IBM was rumored to be in talks with Sun, rumors were going around that Oracle was looking to buy RedHat [localtechwire.com].
When the opportunity to buy Sun, Oracle chose them over RedHat. RedHat wouls probably have cost them only $2bln compared to the $5.6bln it's going to cost to buy Sun. So suck it! :)
or not (Score:3, Interesting)
Okay, I'll make the argument to the contrary: that IBM currently has every reason to be giving their Evil Laugh a big workout right now.
The NY Times this morning has an article saying that basically this is all about Oracle wanting to get into the business of designing, selling, and maintaining integrated systems for businesses that don't want to have to deal with a zillion vendors and bake their own setups. This is essentially what IBM is already in the business of doing. IBM already has a thriving business model where they set up their customers with software and hardware, and a lot of the software they use is open-source.
By buying Sun, Oracle gets a bunch of software. But OpenSolaris, MySQL, Java, and OpenOffice were all already open-source. Well, nothing was stopping them from selling customers a setup that used MySQL, Java, and OpenOffice, even before they bought Sun. That's what IBM does already. You could argue that Oracle gets more control now over these things. Well, yeah, except that because they're open source, they can always be forked, and they'll always be in competition with other open-source projects. Suppose that Oracle, for example, lets MySQL languish for fear of making it compete too effectively with Oracle Database. Well, the OSS community could then fork MySQL, or simply switch to alternatives like Drizzle (low end) or Postgres (high end).
By buying Sun, Oracle also gets a hardware operation. But Oracle has no experience in the hardware business.
There's also the argument that buying your competitors is an easier way to grab market share than out-competing them or out-marketing them. That was a sane argument for buying PeopleSoft. But OpenSolaris, Java, and OpenOffice, and Sun's hardware weren't products that were competing with Oracle's products, and MySQL wasn't really competing in the same arena as Oracle Database either.
Re:It speaks volumes that they were caught out... (Score:4, Interesting)
I'm expecting that Oracle has some interest in keeping the hardware around. Don't underestimate the requirement for storage for databases! There is a business case for Oracle to provide "Database Optimized" servers and storage (SAN, DAS). Storage in particular is very important to Oracle. They've contributed the OCFS clustering filesystem for this reason. More importantly and relevant, Oracle has been sponsoring Btrfs development, as an alternative/competitor to ZFS. So yes, I think the hardware will definitely stick around, at least enough that Oracle can provide turn-key solutions based on ZFS, Dtrace, and iSCSI.
Oracle being in control of both ZFS and Btrfs is a bit scary since the aspect of competitive advancement is gone (there is no other product they have to keep "one step ahead of"), and it is likely that we'll eventually see one of them wither and die. However, in the short term it might make both filesystems better.
Oracle is now the new Apple (Score:3, Interesting)
They control the Oracle experience from end to end and lock everybody else (read: Microsoft) out. Ballmer likely came to that conclusion and said "oh shit." That's why he's at a loss for words.
Re:I still can't believe it... (Score:4, Interesting)
+2 would still be fine, as I was one of those who suspected Oracle might make a move.
It will be very interesting to see how this plays out. For example, Oracle can now add modifications to Solaris to provide acceleration for Oracle. But it doesn't stop there. Sun also provides the UltraSPARC range of processors, so it would be possible - at some point - for Oracle to push some low-level primitives useful for databases into the CPU itself.
Why would they want to do that? Duh! Databases are a huge market. Intel is the standard platform at the moment, but it's very hard to get good, sustained performance. Even if a database-enhanced CPU is sold purely as an accelerator card for PCs, you'd have a good source of income from the hardware unit, which has been doing badly.
But Sun servers would look a whole lot more attractive for databases in data centres if they become much more powerful per $ spent. PCs are too cheap to compete on absolute price, but Oracle could utilize their deeper understanding of both relational databases and data warehousing to make Sun servers significantly cheaper per transaction/second.
Re:It's not that surprising (Score:5, Interesting)
But, Sun is a hardware company - many/most of those customers were buying hardware.
You don't buy SPARCs to run Linux.
The Enterprise solution on DELL/HP (either (L|W)Intel or AMD) may be cheaper on the front end, but as with anything else, you get what you pay for.
I have no real passion or hatred for Linux, but I find the Intel/AMD hardware are just toys compared to the Sun gear. I support 100 or so RedHat/Oracle 9i/10g instances on Dell. I spend the majority of my time fixing Dell issues, as opposed to fixing Sun issues.
What are the chances that Oracle will sell off the hardware line?
I sincerely hope Oracle leverages Sun hardware, and does not spin it off. In addition to Java, MySQL, ZFS, and Dtrace the HW side is a real nice bonus to this deal. It gives Oracle something that MS doesn't have... control of the hardware, which will negate the device driver issues MS faces with whatever OS they drop on the shelves.
Re:OH yes.. (Score:2, Interesting)
by developing a meme-generating meme
A meme-generating meme would kind of be like cancer...
...would it be "the cancer killing Slashdot?"
Re:It's not that surprising (Score:3, Interesting)
So they're a software company. Where is it written they can't branch out? In effect, their salespeople are already selling hardware, because IT application deployments are almost always hardware/software stacks. The difference is that before Oracle salespeople had to hand off the hardware purchase to a hardware partner — along with its commissions.
Oracle is claiming that Sun will add $1.5 billion a year to their profits — starting in the first year. That number may or may not be realistic, but it lacks all credibility if it's based solely on monetizing Sun's (mostly open-source) software. They could make those kinds of profits if they cut costs drastically and do a much better job of selling Sun's servers than Sun has.
Both are eminently doable. There are a lot of Sun people (sales and marketing mostly) that Oracle won't need. And Oracle's own sales force (which is bigger than all of Sun!) isn't hampered by Sun's religious belief that you can sell a SPARC system to any customer if you try hard enough. Oracle will concentrate on selling SPARC to people who actually need it (and it just so happens that most of these people run Oracle software) and stop trying to push it to customers who are committed to commodity technology. Sun has put a lot of work into developing x64 servers [sun.com] that many of their sales people don't seem to care about, except as an x86/Linux-to-SPARC/Solaris migration path. Once these servers are in the hands of people who don't have a stubborn attachment to 1998 market models, they might finally get some traction.
Timeframes and Widenius (Score:3, Interesting)
Re:No, more like setup man.. (Score:4, Interesting)
I think people are so locked in 1990s and they don't see the actual gigantic size of Java reach.
J2ME capable phones, devices are heading to 1 billion mark and with the opening of source, ease of licensing, it will be hard to find anything which doesn't support J2ME.
Desktop java is attacked 24/7 but I actually see apps actually written in Java are hitting top spots in general end user download sites.
As there is a huge confusion and a real bad start in Java FX, its future could be in doubt, I agree to it. Just browsing 2-3 professional java developers blogs and reading their opinions made me think that JavaFX will either restart or completely forgotten.
Will Oracle keep the hardware, or sell it? (Score:1, Interesting)
Oracle sure wanted the software, no doubt. But what about the hardware? Will they keep it, or sell it to someone like Fujitsu? That's bit of news is the next shoe to drop...
Re:Stupid Last Minute Bidders (Score:5, Interesting)
Of course your comment assumes the concept of "maximum bid" does not exist. If you have to bid more than your maximum bid to win, then it wasn't your maximum bid--it doesn't matter whether the other party is rational or not. You seem to be implying that the only way to win against an irrational counter bid is with a larger, also irrational bid.
Not quite.
Lets suppose his rational absolute maximum bid is $100, and he is immune from the excitement psychology that compels people to start increasing their maximum as the counter runs out.
For the sake of argument lets say I am one of those irrational twits who bids things up at the end beyond my maximum price to win. (I'm not.)
Lets also say I'm the current high bidder at $60.00, with a maximum of $80, with 1hour to go.
His rational and optimal bidding strategy is to bid his maximum of $100 in the final seconds of the auction.
Here's why:
If he waits and bids in the final seconds, his $100 will exceed my $80, and he'll become the top bidder at $82.00 and then the auction ends. And he wins at $85.
If he bids immediately, with an hour to go; his $100 will exceed my $80, and he'll become the top bidder at $85, I'll get notified that I've been outbid, and then log in to ebay... I'll see it sitting there at $85, and the pschychological need to win takes hold... so I up my maximum.
I bid $92, but that's not enough, and he still has high bid at $97. And I give up. He still wins, but he's paying $97 instead of $85. Bidding early cost him $12.
Or... I don't give up, and raise my max another $12.. $102. Now I'm back on top at $102. And he loses. Bidding early cost him the auction.
This is why I hate ebay. Its *designed* in such a way that the *optimal* bidding strategy is to try and snipe the auction at the last second. Its just stupid. And it costs the sellers because they aren't getting the best prices (and therefore it even costs ebay fees). Sellers should have the option of creating a 'rolling auction' where each time a bid is placed the auction close is reset a day into the future or maybe 8 hours ... I dunno whatever. Then sniping becomes a much weaker strategy because even if you bid at the last second everyone else has a reasonable period of time to re-consider their bids.
Re:Stupid Last Minute Bidders (Score:3, Interesting)
Personally I would avoid such an auction (unless it was the only way to get a rare item) because I would know that irrational twits would most likely win
They should win. Its an auction where the person willing to pay the most wins the item. That's the point. Why on earth would any seller ever want to sell anything below the maximum they could get for it?
While I don't particularlly like the current ebay format I think an indeterminate end time would piss off a lot of buyers
Perhaps, but the current system pisses off a lot of buyers, and turns them away. I don't buy much on ebay because I hate the system. And the majority of my 'wins' are 'buy it now'.
Another idea for fixing ebay is to switch to a looser and slightly random end time. Instead of '5 minutes left...', '1 minute left'... '10 seconds left'.
Simply say the auction ends on Friday, May 3. And leave it at that. On May 3, say the auction ends: 'Today', until suddenly its done. Bidders will have a pre-determined time it will be over... they KNOW it will be over by May 4 no matter what happens, they just don't know what time it ends on May 3.
The upshot is there is no way to effectively snipe since you don't know what time the auction ends. The best you can do is bid midnight May 2nd, and hope the auction ends really early May 3rd.