Sun: Oracle Didn't Want the Hardware Half
When Oracle purchased Sun, many wondered what the company would do with the hardware part of Sun and it turns out, so did Oracle.
The Financial Times today reports that when Oracle planned to buy Sun it was more interested in the software part of the company. Remember back in April, when the deal was announced, Oracle made a huge deal about Java? Well, apparently, that’s because initially that was all the company wanted.
According to FT (which cites an SEC filing from Sun), Larry Ellison, Oracle CEO and co-founder, made a bid for what Sun describes as “certain of our software assets,” along with taking a minority equity stake. That idea was rejected and in April Ellison bought the whole company. One of his justifications was that he really wanted Java and Solaris along some of Sun’s other software; the other was that the owning the company’s hardware division would leave Oracle “better placed to deal with the way enterprise customers will want to buy their technology in future.”
That brings us quite nicely around to the rumors that Oracle could spin off the hardware parts of Sun, with one of the most likely buyers being HP. FT debunks rumors that HP was ever considering acquiring the company, as speculation suggested around the time that IBM was dancing its dance. According to one source (who apparently had “a ringside seat to the action”), HP was actively engaged for months, spent quite a time doing due diligence and then backed out before putting a deal on the table.
Oracle has said it will not be shedding Sun’s hardware divisions however, a buy from HP doesn’t look completely impossible. The fact that HP spent a lot of time weighing up its options and due diligence means the company likely wanted the hardware but couldn’t quite make sense of buying the entire company, software and all. Do you think Oracle will spin off what is now its own hardware division or do you think Larry Ellison will stand by what his plan to keep the company in one piece? Let us know!