Industry analysts say Oracle’s purchase of Sun is the most game-changing corporate technology play made during the economic downturn, reported the NY Times, with it now being able to provide all the parts needed to be an end-to-end service provider.

“It’s the most significant deal of the decade,” said Dan Olds, an analyst with Gabriel Consulting. “Oracle has a shot here to change the rules of the industry and usher in a new era.”

Oracle plans to offer customers databases, business software, servers, storage systems and networking equipment from one place -- itself. In addition, Oracle will do the hard engineering work to make sure all this technology works well together, Oracle CEO Larry Ellison said in a phone interview with Ashlee Vance.

“The cost isn’t in buying the pieces ... The cost is in the labor of assembling them and making them work,” Ellison said. “It is odd that the computer industry ships all these separate parts and expects customers to assemble them." Continuing on Oracle's merger with Sun's technologies, he said, "You will now be buying this complete system, and don’t have to hire I.B.M. or someone else to assemble it for you.”

Don Lemma, CIO at the SLAC National Accelerator Laboratory in Silicon Valley, believes Oracle’s acquisition of a hardware business should make things much tougher on H.P. and Dell since Oracle will have the flexibility of altering the price of its software in deals where customers want bundles of computing products.

According to Vance, Ellison played down such potential pricing advantages on the bundles, emphasizing instead that customers will save money with Oracle since it will place all of the technology together for customers.

On another note, Ellison said he expected Sun CEO Jonathan Schwartz to resign, which he announced via a Twitter haiku on Feb. 3, stating "Financial crisis/Stalled too many customers/CEO no more." On the other hand, Ellison commented that he was hoping Scott McNealy, Sun's co-founder and chairman, would continue to work with Oracle. McNealy sent an internal memo to Sun employees on Jan. 26, entitled "Thanks for a great 28 years." The full text can be read from CNET's Stephen Shankland's blog. [...read more...]

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