The blogsphere on the Oracle/Sun deal has been hot for the past two days and the Forrester team has just gotten off the phone with Ed Screven, Larry’s Chief Corporate Architect to learn more on the background. Actually Oracle’s commitment, the market reaction, and our analysis provides far too much content to cover in one report or even a quick blog. It will end up in various Forrester reports according to your role:
For infrastructure and operations professionals, James has already unveiled the impact on SUN’s installed base. Everybody operating a Sun hardware based data center is scared by the mere possibility that Oracle might sell the hardware part of Sun. See his blog here.
For various end user roles, the projection of a merged portfolio is the most exciting question. See Ray’s blog post for an initial analysis. Obviously the post-merger integration is the biggest challenge on Oracle's transition from a pure software company to a new software/hardware/appliance/cloud vendor.
A quick recap of the market options and some reactions in the bay over the past day has been posted by Tom Grant. Can other vendors’ product management and marketing professionals capitalize on the deal? Is it a threat or an opportunity for the other vendors? I am sure that Tom will follow up on his blog as always with a spicy kind of humor.
The vendor strategy view of the deal will definitely look at an even more abstract level: Is this deal just another consolidation peak? One small vendor acquired by a larger one – or is it embracing a new era of IT industry strategy?
Please see the Forrester report just published a minute ago here
What the title already indicates is a significant eruption of today’s M&A paradigm and portfolio management in the tech industry. The IT industry can be thought of in four major pillars: Hardware, Middleware/Databases, Packaged Business Apps and IT Services including custom application development. Most 2nd tier vendors are in one corner of this map, while larger vendors like HP/EDS or Oracle drive their core business in two of these portfolio pillars. Only IBM already occupies three out of four. Oracle’s acquisition of SUN is not a tactical move. It’s not only preventing IBM from getting their hands on the Solaris installed base, it means a strategic move into the third portfolio pillar, hardware, now that their market share in middleware/database and in packaged applications is solid. It is still questionable how and if at all, Oracle will be able to digest SUN and merge into an integrated large portfolio vendor like IBM. Obviously IBM’s size and portfolio richness is still unmatched; but Oracle's strategy moves in this direction, while their execution will still have many obstacles to overcome.
Also stay tuned for a great report coming up form J.P. Garbani next week for the second round of strategy analysis in the context of 40 years tech industry history.
The changed Oracle strategy might bring major parts of the IT ecosystem out of balance. How should hardware vendors and the remaining pure play ERP vendor SAP position and re-shape their partnerships? Stay tuned for another post in this blog from Forrester’s latest analyst for vendor strategy in the application space: Holger Kisker in two days.
Let me know what the deal means for you as a vendor and leave a comment.