Earlier last week, an alumnus from the Georgia Tech Student Foundation asked what my thought were on the Oracle proposed deal to buy Sun, the company. Earlier we had seen IBM being looked at as the possible acquirer, but similar to the Microsoft and Yahoo deal, IBM decided not to go for the acquisition. . Oracle offered to pay $9.50/share from trading $6.69, the previous business day. Here are a few things to consider.
The Effect on Open Source
Sun currently owns numberous open source projects:
- MySQL (a database software that is a low cost, less implementation of Oracle Databases)
- Virtualbox (Virtual Machine engine for Linux)
- Java (was to be open sourced, now we will see)
- Open Office and Sun Office
Oracle has traditionally been more commercial in their interests (part of the reason they can acquire a company) so the question is how will Oracle treat these open projects, will they let them branch off, close them and cut support, or will they continue to open the software like IBM tends to do and offer services in line with them? Will oracle move toward a more open model with consulting as their business model?
The 42% premium that Oracle Offered Sun seems like a great pricing that will limit opposition to the takeover that could hurt both companies. Apparently, Sun seemed appropriately valued and has some growth opportunities for Oracle. Their horizontal players in the software market don\’t hurt competitive advantage against the likes of Microsoft SQL either.
Of course, now that the general stock market is going up (particularly the Nasdaq), perhaps Oracle is getting a steal!