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Oracle Makes Software, Sun Builds Computers - Duh

How Tough Can it Be to Figure This Out?

Most times, industry pundits vastly oversimplify the issues technology companies face. But this week's Oracle-Sun megadeal begs for everyone to get their two cents in.

Larry Ellison himself said the deal will transform the industry, and he's right. It creates a new IBM overnight, and has no doubt set off raucous conversations throughout Big Blue, HP, Cisco, Microsoft, Dell, and SAP.

So there's been plenty of shooting from the hip by commentators throughout the world.

But if you've ever been in the management critical path, you know companies are simply incapable of following the no doubt helpful, but unsolicited, advice from the worlds of business and technology punditry.

Months and months can be spent, dozens of key people involved, and untold sums of money spent simply to come up with a name along the lines of File Connector 2.0 or Graf-It. (These names are supposed to be fictitious, but I think you get the idea).

Resources that could feed a million hungry people for a week are squandered as companies struggle in their decision to add "It" or "In" or "Yes" to a slogan.

Seriously, though...
But it's serious business, there is little margin for error, and there is often no logical reason why one simplistic product name or slogan works and another doesn't.

Get it right and you have "Windows" or "The Network is the Computer." Get it wrong and you have "Bob" or "We're the Dot in Dot-Com." Everyone remembers Apple's "1984" commercial, but even Apple would still like to forget its follow-up "Lemmings" commercial in 1985. You can be sure that all of these campaigns seemed like good ideas when they were being planned.

The stakes are magnified when companies do big deals. It's so easy now to blast the Compaq-DEC and the HP-Compaq deals. Ego and hubris did play a role, of course, as did untold amounts of skull-cracking number-crunching. Ego and hubris no doubt played a role in HP-EDS as well, but hey, that one now seems like a good one!

Yet despite the inexact nature of analyzing big business, it seems that there is always a simple, verifiable truth underneath any major business initiative. I think with the Sun-Oracle deal it is as follows: Sun builds computers, Oracle develops software.

This is the essence of the deal, the reason it was made. Throw out McNealy's animus toward IBM and friendly relationship with Ellison. Throw out whether Oracle wants to croak MySql. I don't see how MySql was going to affect Oracle dramatically one way or the other anytime soon.

Throw out questions about the future of Java, and whether it will embolden Oracle to squeeze its software competitors further. Ignore the StorageTek part of the deal...oh wait, everyone already has. OK.

It simply boils down to the major enterprise software company acquiring a major hardware company. An obvious deal. An obvious deal that no doubt made no financial sense when Sun's market cap was $180 billion, and apparently made no financial sense when Sun's cap was $10 billion. But now that it's been announced, 20/20 hindsight makes it appear magnificently obvious.

My personal angle
I had a rather terse exchange with Scott McNealy in the mid-90s, just trying to make conversation while we waited for the CEO of my employer to show up to a meeting.

The appointment's time, location, and topic matter had been painstakingly scheduled over a period of months, and my CEO's lateness that day induced some sweaty palms on my behalf and some scowls on behalf of Scott and his handlers.

The meeting (which ended up being severely truncated) was located behind the scenes at a tradeshow called SunWorld that we had developed to complement a magazine by the same name that we published.

I decided not to try to talk golf or hockey with him, as he didn't seem in the mood. Instead, given we were at a trade show dedicated to Sun's business, I mentioned the business that Sun was in, namely, computers.

The gist of my rather simple point-of-view was that "Sun builds computers."

At that point in time, Sun was the clear market leader in its space and was threatening to drive major players such as HP and IBM right out of the arenas in which they mutually competed.

So why, I wondered, fuss with all this chip-building, software-producing, network-inducing, and other paraphernalia, which was obscuring the message?

My unsolicited opinion did nothing to lighten Scott's mood. He acknowledged the point, then looked at me like he really wished my ----ing CEO would learn to arrive to his meetings on time.

It's a numbingly complex matter to run a multi-billion dollar enterprise. A constant white-noise buzz of little brouhahas must be addressed, with crises deemed major by someone occurring on a regular basis.

You've got to keep your eye on the numbers, the deals, the unhappy customers, the competition, the news, the analysts, maintain your strategic direction, manage some very difficult people, talk to customers, keep in touch with offices all over the world, and somehow stay unfazed, cool, and ready to deliver that killer quip.

Deals are often insanely complex matters, involving extraordinarily long laundry lists of services, features, connectors, backed by long SLAs and reams of legalese.

You can't just go out there and say "hey, we sell computers" the way Sun could do in 1982 and be successful. So why in the world would Scott be anything but annoyed at my unsolicited advice?

But yet, here in 2009, it seems these three words remain the gist of the company and the gist of the Oracle-Sun deal. Sun builds computers.

Oh yes, and Oracle develops software. Put them together, and Voila! You have IBM, West Coast style.

This piece was based on a blogpost by this author.  You can also follow him at www.twitter.com/strukhoff.

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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