Local users and analysts upbeat about Sun’s future

Oracle buy is largely beneficial, customers and industry watchers say

After months of uncertainty, Oracle has achieved its goal of buying one of the world’s most iconic IT companies, providing in the process a roadmap for Sun technologies and products, and increased certainty for New Zealand Sun users.

John Askew, group operations IT architect at the University of Auckland, which is ranked as New Zealand’s biggest user of IT systems and services by CIO magazine’s MIS100 survey, is optimistic about the buy.

“We can take heart from the purchase,” Askew says.

The buy is the latest in a series of acquisitions by Oracle of systems that the university was already using, he says, citing PeopleSoft, Hyperion and BEA Weblogic as examples.

“There’s a trend of Oracle buying the companies we chose to invest in.

“Oracle appears to agree with us.”

After a year of uncertainty over Sun’s fate, it is a relief to know what is happening, he says.

“It is good from our perspective that there is now a future for Sun.

“We still have to wait and see what happens in regards to the exact details, but there’s a future for the server stack we’re using, for Sparc-based architecture.”

University of Auckland is a user of both Oracle databases and MySQL, as well as Sun’s E25K enterprise servers. With so many of the university’s IT systems now being provided by one vendor, it’s a case of viewing the relationship with Oracle as a partnership, not a vendor-customer one, he says.

“IBM and Dell have also acquired companies we used, and when that happens it’s business as usual, but the onus is on us to manage those relationships well.

“Acquisitions are par for the course in this business and from a procurement and relationship management point of view, it is easier to deal with a small number of large organisations than a large number of small ones.”

“It is about making sure our voice is heard, making sure it is a partnership.”

Another large user of Oracle products is Air New Zealand, which uses Oracle and MySQL databases, Sun servers and PeopleSoft applications. CIO Julia Raue declined to comment on the Sun acquisition.

Much of Sun’s product line is open-source, and New Zealand Open Source Society president Don Christie is cautiously optimistic about the prospects for Sun’s open source products under Oracle’s ownership.

“Over the years, Sun has been one of the largest corporate contributors to the open source community,” Christie says.

“There’s OpenOffice and OpenSolaris, Postgres was bundled with Solaris and they bought MySQL.

“That gave some credible corporate backing to open source.”

He is pleased that the European Union examined the planned acquisition closely before giving it the go-ahead.

“They concluded that there weren’t sufficient issues to stop it, but it was good to have that debate.”

While he is “concerned” for staff at Sun who work on the open source products, “there seems to be a strong commitment to carry on with OpenOffice and [there] seems to be a strong commitment to MySQL.”

The open-source nature of much of Sun’s product line offers more security to users than if it was proprietary, Christie says.

“With OpenOffice, there’s a core development team in Germany, but others, such as IBM and Novell, have made significant contributions.

“Even if it was let go by Oracle, it wouldn’t be the end of the road.”

Oracle could theoretically buy another proprietary database vendor and discontinue support, forcing users to migrate to Oracle, but under the open source model, “that’s not a viable scenario”.

“People can take comfort from the fact that the open source model gives more security, not less,” Christie says.

Matthew Oostveen, services research manager at IDC Asia-Pacific, says, “there’s not doubt that Oracle’s acquisition of Sun will have an impact on New Zealand’s IT sector.”

“While I believe there is still some mystery surrounding how Oracle’s new product line-up will look, I believe we will see vertically integrated product offerings consisting of pre-tuned and tested applications, databases, operating systems and Oracle-badged servers and storage.”

That may make things easier for CIOs and IT managers in some respects, Oostveen says.

“New Zealand’s large Sun-Oracle customers may appreciate having one throat to choke in the event of a failure and there is the possibility of renegotiating contracts that take advantage of the lower price points that economies of scale bring,”.

Ovum Australia-New Zealand public sector research director Steve Hodgkinson says, “my impression is that the biggest impact regarding New Zealand users would be around the open source developments of Sun and their future under Oracle”.

There are many small to medium-sized businesses that use Sun’s open source products and that wouldn’t normally be Oracle target customers, Hodgkinson says.

“Those clients will be looking with concern at whether the Sun organisation will become more Oracle-like.

“Oracle has a reputation for playing hardball [over] the commercial aspects of software and is traditionally an enterprise player, whereas Sun is more of an SMB player.”

However, noises coming from Oracle after the acquisition was approved indicate that the open source and development parts of the deal are valued, he says.

“Oracle sees positive value in Sun’s assets and sees Java as a crown jewel of the acquisition.

“It says it will continue to support NetBeans and Eclipse, and so on.”

The MySQL database, which caused the European Union to seek more information from Oracle before it approved the deal, is also a gain for Oracle, bringing it new customers, Hodgkinson says.

The other element in the acquisition is Sun’s hardware stack, and those running Sun-centric hardware shops “would be concerned about how it will play out”.

Oracle won’t kill any of the hardware products it has gained, but if it neglects some of them, “people may form the view that there’s no future in the platform”.

The potential exists for a clash of cultures between Oracle and Sun staff, Hodgkinson says.

“The key thing for customers who are reliant on MySQL, for example, would be to look at the departures of key MySQL staff who may not like the culture Oracle brings to the organisation.”

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