9/4/09 WSJ “Oracle-Sun Deal Draws Scrutiny, and Rivals Circle”

Today’s article in the Wall Street Journal on the Oracle-Sun Deals mainly talks about how a lot of businesses are skeptical of the Oracle-Sun deal. They view the deal as a sign that Sun’s hardware business will suffer and so they are open to considering alternatives. Rivals such as IBM, HP, and Dell are ‘feeding off’ of this uncertainty by offering discounts and other incentives to switch. The success of the rivals’ poaching efforts are manifesting in Sun’s declining revenue and market share (37% decline compared to 30% experienced by overall industry). I’m not sure what this means for Sun’s hardware business in the long-term though. It seems that Oracle will bundle their database and Sun hardware as package deals to customers where one can’t buy Sun hardware without purchasing their database? How will Oracle reduce fears of vendor lock-in and convince buyers that they will further invest in the hardware business, although Oracle has always been primarily a software company?