Monday, April 20, 2009

Oracle adquiring Sun, our opinion.

Now, it is official, Oracle adquires Sun, amazing news. Both were innovating companies changing the world. The competition and the commodity HW becoming very powerful, Linux becoming highly reliable damaged the core business of Sun Microsystems but not its envision and innovative aim. From the start-up perspective, we hope JAVA and MySQL not being "frozen" or discontinued, as they are common plaforms for continous innovation :-)
Regarding the pure M&A perspective, we welcome the Oracle move. The Sun core business was progressively eroded and being the IBM-Sun merge difficult due to monopolistic control, Oracle had the chance to wait and try to adquire cheaper in a few months BUT TIME IS GOLD and they preferred to do now, congratulations. If both companies had a lot of sinergies, Oracle has a lot of cash for investment, if other players as Cisco are coming into new business (Unified Computing), then, no reason to wait.
We are sure about seeing more merges and adquisitions involving huge "flagship" companies along these economical downturn times. The lesson to be learnt by middle size companies, with positive cash, is about they have a huge ocean of opportunities, when VC funding becoming scarce, to expand their portfolio investing/merging/adquiring early stage technology or service companies. Perhaps if VC firms are being so shy for a while, time to M&A focused on SME to "upgrade" their role from supporting actor to the leading role.
Let us turn crisis into opportunity.


François said...

Unfortunately M&A firms are too many focused on huge operations. M&A involving SME's requires different skills regarding finding matching companies(requiring a lot of tech trends and start-up's evaluation) and adapted deal terms.
In any case, your point is correct, there are a lot of opportunities now.

Anonymous said...

This moment when many companies are looking how to save money due to the economical difficulties, and finally they are cutting on small expenses, others are building their portfolio and strategy for the future. It is the moment to be ready to compete when the market is up again, maybe it is not going to be tomorrow, but when the recovery arrives the competitors may be so far from us, while he have been looking around doing nothing.

Great acquisition, and maybe there are too many others that are not on the news because they are not so big… waiting for next one.

juan said...

François, Anonymous, thanks for your comments, nice to see our readers following the conversation.

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