How Oracle Can Get the Most Bang for Its Buck
Not many of you agreed with me two weeks ago, when I predicted that Oracle would be the one to snap up Sun Microsystems following the breakdown of talks with IBM. But as it turns out, Larry Ellison did -- and he was the only one that really mattered.
What has us all buzzing now, of course, is what will happen next. The Oracle acquisition of Sun is definitely an event that will reshape the industry. In the short term, however, Oracle claims it can wring $1.5 billion in profit from Sun this year and $2 billion the next. I don't know how it plans to do that, but since Larry took my advice earlier, I thought maybe he'd like to consider these suggestions, post-merger:
10. Unify your identity management products. The identity management market is crowded, with few stand-out offerings. LDAP servers are a dime a dozen. Thinning this herd will make it easier to acquire customers and market aggressively against the real threat in this space: Microsoft, which is developing an identity management platform based on Active Directory. Cherry-pick the best from your existing technology and Sun's stack, discard redundant efforts, and forge a strong leadership role while you still can.
9. Consolidate global development teams. Everyone hates it when American tech companies move development jobs overseas. Doubtless more heads will roll as a result of Oracle's Sun acquisition, but at least some of them won't be on these shores. While Sun maintains development facilities in India, China, and elsewhere, Oracle is an acknowledged master of offshoring. By redeploying its existing overseas staff, Oracle can create efficiencies in Sun's software divisions that Sun couldn't have managed on its own.
8. Restructure your conferences. Between shrinking travel budgets, fluctuating fuel costs, and increased airport security, customers are growing increasingly reluctant to travel to industry trade shows. What's more, with municipalities everywhere facing declining tax revenue, lawmakers are sure to be eyeing hotels and convention centers to take up the slack. Sun spent last year's JavaOne jabbering about RIAs and Web 2.0 -- again. Do we really need a whole show for that? With Sun, Oracle, and BEA now sharing the same address, it's an ideal opportunity to make OpenWorld the premiere destination for Java developers everywhere (and save some cash in the process).
7. License Sun's server technology to a partner. Hardware isn't Oracle's forte. Sun's team brings the technical know-how, but in a shrinking economy its pricey, high-end servers don't stand much chance against the x86-based competition. Oracle should de-emphasize Sun's hardware divisions and renew its relationship with Hewlett-Packard -- or some other partner, such as Fujitsu -- to produce co-branded servers. That would allow it to concentrate on selling end-to-end enterprise application solutions, which is what it does best.