Oracle Buys Sun

Finally the beleaguered Sun Microsystems has got a suitor. Oracle Corp. has inked a deal to buy struggling server vendor Sun Microsystems for $9.50 per share, representing a 42.0% premium to Sun's closing price of $6.69 on Friday afternoon. This deal is worth $7.4 billion, or $5.6 billion net of Sun’s cash and debt.

What does it mean to us as a consumer? Now Oracle will own Sun's Solaris operating system, Java programming language, and servers and storage hardware systems businesses. Integrating its enterprise software products with now added server and Solaris OS it can provide a off-the-shelf ready-to-use product which you can buy, bring to your office, plugin to your network and voila! you are all set to start your applications on your server. These are exciting propositions. Oracle will be the only company with products like this, though IBM has its products on the same lines but the software products of Oracle have a greater demand.

Oracle is predicting that it will generate $2.0 billion in profits for Sun two years after signing the deal, which is expected to be sealed this summer. So it seems to be a very exciting buy after all. Looks like Larry Ellison is going to enhance his riches manifolds. He has taken a bold decision and only time will tell whether it is going to pay.