(WEB HOST INDUSTRY REVIEW) — Oracle Corporation (www.oracle.com) and Sun Microsystems (www.sun.com) have entered into a definitive agreement under which Oracle will acquire Sun for approximately $7.4 billion, just weeks after Sun rejected a $7 billion acquisition offer from competing hardware and software provider IBM (www.ibm.com).
According to Sun’s Monday announcement, Oracle will benefit from Sun’s Java and Solaris software. Java is especially important to Oracle, which is the language and software platform for Oracle’s Fusion Middleware, the company’s fastest growing business. Sun’s Solaris operating system is the leading platform for Oracle’s largest business, the Oracle database. This acquisition will help Oracle optimize the Oracle database for some of the unique, high-end features of Solaris.
“The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,” Oracle chief executive officer Larry Ellison said in a statement. “Oracle will be the only company that can engineer an integrated system — applications to disk — where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.”
In a move that sent its share prices plummeting 25 percent, at the beginning of April, Sun rejected an offer from IBM, which seemed to be its only means of survival for the once-illustrious Silicon Valley firm that has been losing market share since as far back as the dot-com bubble burst.
Sun CEO Jonathan Schwartz said the deal will bring new life into his company. “This is a fantastic day for Sun’s customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace,” Schwartz said in a statement.
“From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system and Sun’s SPARC and x64 systems. Together with Oracle, we’ll drive the innovation pipeline to create compelling value to our customer base and the marketplace,” Schwartz said.
Sun’s board of directors unanimously approved the transaction with Oracle, and it is anticipated to close this summer, subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.
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