Oracle's vertical integration - A move towards Cloud Computing ?
I read about Oracle’s acquisition of Sun; a move which had been preempted and discussed after IBM’s failed attempt to acquire Sun few months earlier. And then the obvious question “ Why Sun” ?
As per my understanding, Oracle acquired Sun for open standard Java language , a backbone of various applications and mobile phone related software . The second reason is Solaris on which a high number of Oracle database runs. Also a significant chunk of Sun’s revenue comes from maintenance services( around 40%) , a revenue stream which Oracle cannot ignore and which means Sun’s hardware business is still going to remain(though Hardware is considered to be a low margin business). And should we account of Sun’s customer base too..
But most importantly, with acquisition of Sun, Oracle now has control over the complete stack from business application to hardware, which is important in the emerging space of “Cloud computing”. Cloud computing requires all the components behind the cloud to be really tightly coupled so as to become a utility service (time based or usage based. But does it leads to lesser choices for customer? Well that’s a choice you have to make for lower cost of utility services
But it needs to be seen what are its plan around MySQL and Java both on open source and with one of them competing with Oracle’s own offering. Can we see more similar players getting into vertical integration- IBM, SAP, HP etc to build an end to end stack? Talk about going back in time.
