Oracle’s Hardware Strategy in Focus: Storage is a Keystone

InsightaaS: David Vellante is one of the world's leading storage analysts. He is the founder of Wikibon, an open source analyst community. In this piece, Mr. Vellante looks at Oracle's hardware strategy. In it, he states that "Oracle didn’t buy Sun to expand its hardware business in the near term. It bought Sun for two primary reasons in my opinion: 1) to gain control over Java and 2) to vertically integrate its stack and compete with the likes of IBM and EMC/VMware."

 

Three and a half years after Oracle’s acquisition of Sun, experts continue to debate whether the move was a good one for the world’s largest database company. Adding to the controversy, evidence surfaced last year from HP’s lawsuit against Oracle that certain Oracle sales execs viewed Sun’s hardware business as a "dog," a claim with which Larry Ellison has said he disagreed. Nonetheless, those on the negative side of the table pinpoint Oracle’s shrinking hardware business, which has seen dramatic declines since the acquisition. Indeed, over the past twelve months, Oracle’s hardware revenue was off 13% in constant currency to $5.4B. Despite Larry’s point of view, this decline in my opinion is precisely because much of Sun’s hardware business was a dog–particularly it’s low-end server and much of its disk storage business.

So it’s hard to argue from a revenue growth standpoint that the acquisition of Sun was a good move for Oracle. But Oracle didn’t buy Sun to expand its hardware business in the near term. It bought Sun for two primary reasons in my opinion: 1) to gain control over Java and 2) to vertically integrate its stack and compete with the likes of IBM and EMC/VMware...

Read the entire post: http://wikibon.org/blog/oracles-hardware-strategy-in-focus-storage-is-a-keystone/