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12/16/2009
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Global CIO: Oracle-Sun A Bad Deal? Only A Fool Would Say That

Oracle buying Sun is bad business, says Motley Fool, but that analysis is simply, well, foolish. Here's why.

CIOs want seamless, flexible, optimized systems that require less and less customization and extensive configurations and reconfigurations provided by multiple vendors with multiple throats to choke. So IF Ellison can keep the great technologists and engineers at Sun happy, motivated, and focused, this integration will be a big winner.

Can Ellison achieve that cultural integration? Bylund says companies with different cultures often clash during and particularly after an acquisition. But is there a company this side of Cisco with more expertise and proven processes for integrating and assimilating newly acquired companies than Oracle?

And in the specific case of Sun, Ellison has fought for—publicly and unflinchingly and with a very open checkbook—Sun and its vision and its employees and the technologies they've created. Is there no goodwill that will follow from that? Or are we to believe that Sun's technologists and engineers and developers and marketers are so wildly different from those at Oracle that the Sun folks would prefer to die a long and slow and miserable death by starvation rather than become part of a hugely profitable and aggressive global powerhouse with a deep desire to do great things?

I'm sorry, but what the hell kind of culture would clash with that? And if that's what Bylund is saying—that the Sun culture spurns profits, spurns aggressive competition, spurns ambitious vision, and spurns a lifeboat when it's drowning—then if that is indeed the case, then yeah, I agree with Bylund. But I don't buy that that's the case—it's nonsense.

And then, when describing the neighbors in the neighborhood Sun will live in should the deal go through, Bylund must have been daydreaming. Here's what he said:

"This deal positions Oracle closer to IBM and Hewlett-Packard as an all-around provider of everything, and I suppose there might be some synergies in there somewhere. But mashing together two very different corporate cultures often spells disaster, and when you sell everything including the kitchen sink to your customers, you end up competing with old partners like HP and Dell."

From that, two critical points to consider: first, ending up in a position akin to that of IBM and HP, and second, the prospect of competing with partners.

I might be hallucinating, but I'm pretty sure IBM's stock price is bumping up against its 52-week high recently—and it's hitting those high notes because IBM has been phenomenally successful with its strategy of being "an all-around provider" wherein "all-around" for IBM is defined as products and services that provide value to customers and attractive profits to IBM.

But Bylund seems to be saying that the position of "all-around provider" like IBM and HP is a losing proposition. Yet HP, on its way to becoming the largest IT company in the world, has embraced that position and CEO Mark Hurd intends to pursue it even more aggressively going forward. So I'm not sure what Bylund's point was there—damning with faint praise?

On the supposed danger of competing with partners: I know Bylund's a sharp guy and knows the tech business well, so it can't possibly be a surprise to him that all of the top IT companies compete with each other. All of them. Nevertheless, HP CEO Hurd and Ellison both say their companies have great relationships with each other and look forward to focusing on the many ways in which they collaborate as opposed to the few ways in which they compete.

And HP has a vast spectrum of hardware products, while Sun's is less broad but more specialized and in some cases very highly sophisticated—and Ellison wants to leverage that power and expertise with what he calls "hardware-optimized software." If anyone doubts the notion that every big partner competes with each other, check out this column: Global CIO: Upheaval In The IT Industry: The End Of The World As We Knew It.

Standing still—sticking strictly to what you already know—is not a winning strategy in today's rapidly changing IT industry where the prime value is not what stuff you have in the lab but rather what you can do for your customers right here and right now. In acquiring Sun, Oracle will dramatically enhance its ability to give customers what they want and need, rather than just try to sell to them what it happens to have on the shelf. And if that's a Pyrrhic victory, then I'd sure like to know what a strategic victory is.

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at bevans@techweb.com.

<

RECOMMENDED READING:

Global CIO: Why Oracle's Larry Ellison Will Tell The EU To Pound Sand

IBM CEO Sam Palmisano Talks With Global CIO

Global CIO: An Open Letter To Oracle CEO Larry Ellison

Global CIO: Where Do Oracle's Profits Come From?

Global CIO: Oracle Dumps HP After Co-Creating 'Most Successful Introduction Ever'

Global CIO: Sam Palmisano's Grand Strategy For IBM

Global CIO: In Oracle Vs. SAP, IBM Could Tip Balance

Global CIO: Upheaval In The IT Industry: The End Of The World As We Knew It

Global CIO: IBM's Game-Changing Plunge Into Predictive Analytics

Global CIO: An Open Letter To Hewlett-Packard CEO Mark Hurd

Global CIO: Hewlett-Packard CEO Hurd's Strategy: The Infrastructure Company

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