Oracle-Sun: Apps, systems management coup for customers

Oracle customers using Sun hardware won't be able to beat the application and systems management technology from the merged companies

Oracle and Sun customers could find the combined company a win when it comes to managing Sun systems and Oracle applications.

Oracle's $7.4 billion bid for Sun might win customer favor, industry watchers say, as the sum of the two companies' management technology portfolios will provide much greater value than the stand-alone parts.

"I see this acquisition as a real coup for Oracle from a management perspective," says Andi Mann, vice president of research at Enterprise Management Associates (EMA).

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Oracle hasn't made much noise in the systems management market, though experts have been speculating recently about the company's need to acquire solid management software if it wants to compete with the likes of HP, IBM and Microsoft. But with acquisitions such as ClearApp and mValent under its belt, Oracle has been able to build a strong application management product for its customers.

"Oracle Enterprise Manager (EM) is a solid management solution, with surprisingly deep capabilities. However, it is very Oracle-centric, and that has always been its biggest sticking point," Mann explains. "Sun's Ops Center, Management Center and N1 solutions will combine with EM very organically. The combination will go a long way toward lifting Oracle in the management stakes, and for Oracle-Sun customers in particular it will be very hard to go past."

Yet the combined company won't be able to compete head-on with vendors such as BMC, CA, HP and IBM, each of which offers heterogeneous systems management applications.

"Sun was not exactly beating the market in management, so even the combined solutions of Sun and Oracle will not rival larger vendors such as IBM Tivoli or HP (or non-hardware management vendors like BMC) in breadth and functionality and platform support especially," Mann says. "For Sun and Oracle enterprise customers, this makes Oracle much more attractive as a primary vendor, because it has exceptional depth and expertise in those specific areas."

Still Oracle will increase its management capabilities so much so that customers won't be able to ignore a combined Oracle-Sun management stack. It would rival IBM- or HP-specific offerings, experts say, and potentially draw customers to Oracle for their management software needs in that environment.

"Oracle will link their software and database management with Sun's systems management solutions so they will have a more complete stack for managing their own environment," says Jasmine Noel, co-founder and principal analyst at Ptak, Noel & Associates. "This means customers can have an integrated management solution for Oracle software on Oracle hardware just as they can for IBM software running on IBM hardware or HP software running on HP hardware."

For some, the Oracle-Sun deal could be seen as an opportunity for management software makers, experts say.

"There is an emerging Oracle 'Red Stack' opportunity now that Oracle offers a stack that extends from storage up through servers, operating systems, database, middleware, applications and business intelligence. Providing tools that integrate and optimize the Oracle offerings are now a distinct opportunity for these third-party vendors. Vendors such as BMC, CA and HP are well positioned to provide systems management and data center optimization software that wraps the Oracle stack and allows systems managers to automate operations and reduce expenses," according to Technology Business Research.

Meanwhile, industry analysts don't think the vendor is done acquiring management technologies just yet.

"[This acquisition] will slow down Oracle's management software acquisitions, except maybe a few smaller deals -- you can't spend more than $5 billion and not rearrange your other acquisition plans," Noel adds. "But I think Oracle's goal to have a complete stack for managing their own environment hasn't changed because of the Sun acquisition."

And while Sun offers Oracle many technologies, heterogeneous enterprise-level management isn't one of them.

"Do they need more management capabilities? Absolutely. Sun doesn't fill that need for them, despite lots of intellectual property buried within Sun. I still contend Oracle will make a play for either BMC or CA," says Glenn O'Donnell, senior analyst at Forrester Research. "That would beautifully round out the Oracle story for broad-based value to IT. Oracle will force a fit. Its bravado has an upside in such situations."

While application and systems management capabilities at Oracle and Sun mostly complement each other, the vendors will face off in the realm of identity management. Oracle and Sun compete directly with identity management technologies and strategies -- especially since Oracle picked up Bridgestream and Sun bought Vaau -- and the combined company will be tough to beat in that market, industry watchers say.

"Both vendors are leaders in the identity management space, and it remains to be seen how the product overlap will be rationalized," says Scott Crawford, research director with EMA. "The two will make a formidable force, with IBM and CA being the most direct competitors and Microsoft being the wild card in the mix."

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Copyright © 2009 IDG Communications, Inc.

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