Microsoft could be a winner in Sun-Oracle deal

If Oracle alienates its server partners and lets MySQL languish, Microsoft could be the beneficiary

Microsoft has had few critics more vocal than Oracle CEO Larry Ellison and Sun Chairman Scott McNealy. With their companies set to merge in a blockbuster US$7.4 billion deal announced Monday, is it time for Microsoft to worry?

In fact, the opposite may be true, some industry observers said.

If Oracle retools itself as a systems vendor, as it suggested that it might, that could put pressure on server vendors such as Dell and Hewlett-Packard to cozy up more with Microsoft, which does not operate a competing hardware business.

"Historically, [Oracle] has been a major partner for HP, given HP's lack of a large software business," wrote Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co. "Going forward, we believe that HP is likely to push alternatives to [Oracle] when possible, given that they are now direct competitors in the hardware space."

If hardware divisions at Oracle partner companies feel threatened by the deal, it could be bad news for Oracle's software business, according to Miko Matsumura, a former Sun executive who is now deputy chief technology officer at Software AG. "The hardware business is king, and anything that threatens that becomes your mortal enemy," he said.

Matsumura believes the deal could drive HP into a tighter relationship with Microsoft as Oracle tries to work through the massive acquisition. "In the midterm, I think it [will be] a big bloody mess," he said of the deal. "I think HP is going to steer clear of Oracle."

Another bonus for Microsoft is that there may soon be one less database vendor for it to compete with, since MySQL and Oracle's database will be under one roof. It is unclear whether Oracle will continue to develop and market MySQL alongside its proprietary database, and some think it will allow MySQL to languish. That could give Microsoft's SQL Server more opportunities among Web database users, where MySQL currently dominates.

"I don't think that MySQL is going to thrive now that it is part of Oracle," said Matt Rosoff, an analyst with Directions on Microsoft. "That's kind of a plus for Microsoft."

Some analysts expect Oracle to spin off Sun's hardware business to a company such as Fujitsu, but Ellison didn't offer much insight into his plans during a conference call Monday. He said that software, in particular Solaris and the Java programming language, were "instrumental in Oracle's decision to acquire Sun," but also noted that the acquisition could help Oracle to deliver integrated systems for datacenters -- including the database, middleware, storage and servers.

Oracle has said it intends to make Sun's server business more profitable. If it decides to invest in hardware and become a real systems vendor, that could mean trouble for its partners, who would have to compete with a revitalized Sun product line, according to Stuart Williams, an analyst with Technology Business Research.

"If Oracle retains the complete Sun hardware business, they're no longer a software company; they're a systems company that puts pressure on companies like Dell," Williams said.

But IBM will face pressure too. It would have a more powerful datacenter rival in a combined Oracle-Sun, which would sell a complete enterprise stack of hardware, operating system and infrastructure software -- something IBM alone had previously been able to offer.
Microsoft did not respond to a request for comment for this story. The company's CEO, Steve Ballmer, told reporters in Moscow Monday that he was "very surprised" by the merger news, according to Reuters.

"I need to think about it," he said.

Agam Shah in San Francisco contributed to this story.

Join the PC World newsletter!

Error: Please check your email address.

Tags HPOracle-Sun mergerdatabasesMicrosoftSun MicrosystemsmysqlOracle

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Robert McMillan

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?