April 27, 2009 -- The crown jewels in the Oracle-Sun acquisition are Java and, to a lesser degree, the Solaris/SPARC platform and, to a lesser degree, the MySQL database. But what about Sun’s storage lineup?
Here’s a clip from Ellison’s statements on the acquisition: “We will be able to tightly integrate the Oracle database to some of the unique high-end features of Solaris, engineering them to work together and for the first time to deliver complete, integrated computer systems – database to disk – optimized for” yada yada yada, but what disk system(s) will carry the load?
Although Sun has some interesting storage-related software technology (the ZFS file system and Open Storage code/initiative) that Oracle could capitalize on, what about the hardware?
For the most part, Sun is a storage reseller, OEMing its high-end arrays from Hitachi Data Systems and its mid-range gear from LSI’s Engenio division. But complicating the picture, Oracle has its own branded storage array via an OEM deal with HP. Not to mention Ellison’s pet project, Pillar Data Systems (which is funded by Ellison, but separate from Oracle).
And then there’s the Sun StorageTek tape business.
Some pundits have opined that Oracle will jettison all of the storage hardware elements. No way, because they’re already in the hardware business via Sun’s servers and why pass on some decent (although not as decent as software) margin business. However, the company definitely can’t go forward with all of the storage lines. There’s just too much clash.
Should I stay or should I go now?
I predict Oracle goes with two disk array lines. Factoring in Ellison’s ego, one would argue that Pillar stays. However, the HDS and LSI gear gives him a reasonable reason to pull the plug on Pillar and cut his (pocket change) losses. Then again, did I mention that he has an ego? It’s a tough call because Pillar definitely overlaps with Sun’s storage hardware.
Since Sun’s storage business is largely a reseller business, why not just continue to let HDS and LSI do all the work and throw some hardware bones to Oracle’s sales reps? Sure, Oracle sales reps don’t know how to sell hardware, but you wouldn’t have to retain all that many Sun sales reps to keep that business rolling. The downside to this is that it puts Oracle in direct competition with partners such as EMC, NetApp, etc.
Another option: Jettison the HDS, and perhaps LSI, relationship and extend the HP relationship and just concentrate on purpose-built, highly-optimized storage systems for Oracle databases. That option eliminates, or at least diminishes, the prospect of competing with partners such as EMC and NetApp in the more broad-based storage landscape. Then again, the HDS and LSI products are very solid and represent a lot of revenue if Oracle is willing to butt heads with partners such as EMC and NetApp.
And then there’s the Sun StorageTek tape business. Selling that off doesn’t seem to be an option. Who would/could buy it? IBM? Talk about monopoly. I never understood why Sun bought STK in the first place (access to mainframe accounts?), but it’ll be much harder for Oracle to figure out what to do with this business. Then again, it’s a profitable business with relatively low maintenance.
Yet another option would be to essentially spin-off Sun’s storage business.
What would you do with Sun’s storage hardware business if you were Larry Ellison?
posted by: Dave Simpson