Thursday, April 23, 2009

Oracle Wants Sun's Installed Base

It's fitting that IBM (IBM) and Oracle (ORCL) have been the ones fighting over Sun Micro (JAVA). Both have taken an aggressive approach to growing their top and bottom lines -- compared to, say, Microsoft (MSFT). The markets have rewarded growth over increased EPS as a result of retiring shares alone.

Sun Micro is a shell of its former self 10 years ago. It is simply being put to rest through this deal. For years now, it has struggled selling its older expensive OS (SPARC Solaris) in the face of Linux. Java has been popular but hasn't replaced that declining Solaris revenues.

Left alone, Sun would have continued to shrink. Why do ORCL and IBM want to buy them? Installed base. Both want those relationships which Sun has had for years so they can upsell new ORCL and IBM gear.

Sun's shareholders will ensure the deal gets done this time.

Originally published in on 4/20/2009 7:56 AM EDT

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