Monday, we surmised that Oracle’s acquisiton of Sun would raise the stakes for Cisco in data center computing by presenting a more formidable competitor. Today, we offer a contrarian view from an industry analyst.
Oracle acquiring Sun might actually be good for Cisco due to Cisco’s existing partnership with Oracle and Sun’s leading position in the high-end of the server market, according to Zeus Kerravala of the Yankee Group.
“In Cisco’s computing push to partner with other companies, Sun’s the only one they haven’t made an enemy of,” Kerravala notes. “This might help Cisco become a little closer to Sun. This could actually strengthen the (Cisco/Oracle) partnership by bringing Sun into the fold.”
Kerravala believes Oracle acquired Sun more for its Java and software prowess than for its presence in server hardware. Oracle may focus intently on the Sun software while relying on partnerships like the one with Cisco for hardware expertise, he posits.
Kerravala says he wouldn’t be surprised if Oracle spins off Sun’s hardware business.
“It hurts Oracle from a margin perspective,” he says. “The real value in Sun right now is the software, what Oracle’s all about.”
Oracle, though, said it will look to make Sun’s server business profitable after the merger, which doesn’t sound like a plan to divest it. Kerravala makes some credible points but we’re of the belief that Oracle is now in the hardware business to stay — and that relations with Cisco become strained because of it.
Stay tuned.
More from Cisco Subnet:
Cisco spilling beans on Unifed Computing System pricing Cisco lands second big ASR 9000 router customerCisco to make splash at RSA ConferenceCisco scammers coming out of the woodworkH.323 and SiP Dial Peer ConfigurationCIOs split on Cisco blades vs. HP networking: surveyProtocol FuzzingApril giveaways: win free training worth up to $3,495 and free booksGo to Cisco Subnet for more Cisco news, blogs, videos, security alerts, giveaways. Like e-mail? Subscribe to the Cisco Alert newsletter. Like RSS readers? Subscribe to the Cisco Subnet RSS feed
Follow Cisco Subnet on Twitter.
