Sun: Oracle Didn't Want the Hardware Half

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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!

Jane McEntegart
13 Comments Comment from the forums
  • Tindytim
    Some of this worries me.

    I mean, quite a bit of their software is open source, what they've already put out can't be taken back, but I can't help but be a little worried Sun will get bought out and OpenOffice.org will be a little less Open.
    Reply
  • TwoDigital
    Oracle's own "OS" is just a custom version of RHEL on Intel. I'm not sure what they're planning on doing with the Sparc architecture, but I'd be nervous if I was in the Solaris for Sparc "Closed Source" development team right about now. Solaris "11i" is more likely going to be Intel/AMD-centric... and spinning off the hardware division without Sparc Solaris going with it would not help the situation too much.
    Reply
  • TwoDigital
    ...being a Linux person, however, I'm more worried about MySQL than I am about Sparc.
    Reply
  • hellwig
    I can't see oracle getting into the server business. While it might make sense to sell an entire package (machine + database software), it's just too much headache for a software company. Besides, Oracle would not want to limit it's customer base to only those that purchase Sun hardware, so it would still be supporting other platforms as well.

    I am a little worried about buying an entire company for Java. What does Oracle plan to do with Java, and how long will it stay free? Same with MySQL.
    Reply
  • antilycus
    they'll chop up the hardware and sell it to IBM. Its all about money and killing as many jobs and families as possible.
    Reply
  • antilycus
    to the person that gave me a thumbs down. PROVE to me how its not about consolidating to save costs and liquidating employment to save costs... these companies where starting to make money and even if they go under, the business starters will still leave plenty freaking rich.
    Reply
  • rockerrb
    I think that IBM would be a more likely buyer of Sun's hardware divisions than HP.
    Reply
  • ta152h
    HP wanting their hardware makes no sense at all.

    Why would they? They already have deprecated Alpha, and PA-RISC, and now they need another one to add to their stable of dying platforms? HP helped invent, and is very committed to the Itanium.

    Sun has been forever late with Rock, and even when it comes out, it probably will not offer anything many people want. The last thing HP needs is another dying platform. Everyone wanted Java, but the hardware end of the business is all about decay and death, and properly belongs on the category of pathos.

    Oracle may decide to keep it, but no one else would. They may find a synergy between the hardware and software, and might find a whole solution is appealing to customers. I don't know. IBM has certainly been very successful with their mainframes doing this for over half a century, so there is a precedence for it.

    I doubt even IBM would want Sun, without the software. Java was the big prize, of course, but even Solaris would have been interesting for them. Most servers are too primitive and inflexible for it to make much sense to buy Sun, but since IBM's mainframes are much more advanced than the x86, SPARC, or Itanium dinosaurs they call servers, it would really work out well. Since they already have optional processors for running Linux on the z10, and have optional processors for Java, it would not be impossible to add an option for SPARC chips as well, and then your sysplex could run Solaris with MVS(or z/OS), Linux, etc... all on the same machine. This would allow customers to consolidate many servers, even of different types, which in itself would save money and space, but additionally, they would be able to move from Unix to more advanced operating systems like z/OS over time, without much disruption if they chose.

    So, if IBM can get Solaris with it, and cheap, I wouldn't be surprised to see them buy it, and then try to move people to their mainframes by adding the technology to it. It's the only thing that makes any sense to me, but, most likely there are other scenarios that do too. But, I doubt any of them involve HP.
    Reply
  • Niva
    IBM does NOT want a hardware division, I think they also were more interested in Java than anything else. Lets face it, the sparc architecture isn't going anywhere fast these days, they stopped evolving at the pace required to remain competitive years ago.

    The OSS stuff, if it's closed, will be renamed and managed by other companies at some point as open while oracle will market their upgrades to it for pay.

    I am curious about how this works out too, spent many years working on Suns at the university, they were good machines.
    Reply
  • ta152h
    Niva, you realize IBM already has a BIG hardware division, right? You realize they have very advanced manufacturing ability, right? You realize they have an enormous mainframe division, that is growing market share, right? You realize they already are the leading server vendor, right?

    They are still a hardware company, as well as a service company. They aren't trying to get out of the hardware end of it. They just don't want to be in the commodity hardware space. Their mainframes are very big sellers, and this might help them sell even more. I don't know if it makes sense for them, or not, but they are surely in the hardware business. Billions of dollars worth in it.
    Reply