Business

Analyst's keen on Oracle-Sun deal

Monday, April 20, 2009

Aside from the weather, another sun was heating up Monday morning. Shares are way up on news of a $7.4 billion mega merger between Santa Clara's Sun Microsystems and Redwood Shores-based Oracle.

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What IBM could not do a few weeks ago Oracle has done. It is buying Sun Microsystems for $9.50 a share. Investors are not the only ones excited about this deal. It is also a big deal for people who analyze the industry. They say it is a great fit between classic hardware and classic software.

There are numerous plusses for both sides.

Professor Kevin Walsh at the Santa Clara University Business School worked for Sun Microsystems for ten years, up until 2001. He sees opportunities, growing pains and layoffs coming out of the deal.

"I think it's inevitable. I mean we're going through a period of consolidation, not only in the software industry but in industry generally. So, I expect there will be some shakeup. Some of this overlaps in the administrative, financial and marketing areas. But, what I think is interesting is that you've got a nice compliment of products here and that I would say is a positive side as far as engineering is concerned," he said.

"With the acquisition of Sun, Oracle is now able to make all the pieces of the technology stack fit together and work well... storage, computers, operating systems, databases, middleware and applications," said Oracle CEO Larry Ellison.

Professor Walsh says this is the kind of thing you see as Silicon Valley matures. He expects to see other similar deals go through, citing HP specifically because they are direct competitors.

Investors seem excited about the deal. Sun shares were up $2.00, up to $9.14 a share Monday morning.

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business, terry mcsweeney
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