Oracle President: Sun Acquisition Absolutely Paid for Itself

Written by The VAR Guy 1
January 28, 2013

Oracle Corp. (NASDAQ: ORCL) President Mark Hurd says the Sun Microsystems acquisition, which occurred three years ago, has absolutely paid for itself in terms of cash flow vs. the purchase price, and thanks to acquired technologies like hardware and Java. Here's the background from Hurd.

During a wide-ranging, half-hour media call today, a journalist asked Hurd if the Sun acquisition had paid for itself.

“Yes,” Hurd said without hesitation in a firm, confident reply. “If you just look at something like cash flow in relationship to the purchase price, the cash flow has far exceeded the purchase price. There’s the Java element that’s both a financial and enablement piece. Then there’s the support base it gave us. And the hardware revenue stream has been accretive,” setting the stage for Exadata and Exalogic.

When Oracle acquired Sun Microsystems three years ago, the hardware company was in a free fall. Solaris and SPARC technologies were being pushed aside by Linux and Windows Server running on x86 architectures. Wall Street, in particular, was running to Linux on x86.

Oracle hasn’t exactly reversed that trend — Linux and Windows on x86 continue to grow. But Larry Ellison and Co. managed to stop Sun’s bleeding, cut operational costs and also refocused all of Oracle and Sun on engineered systems — hardware and software designed to work together. The goal: Make sure each piece of the integrated stack (microprocessor, server, operating system, database, application, middleware, etc.) is best of breed.

In Oracle’s fiscal 2013 Q2 results, announced December 18, 2012, the company said new software licenses and cloud subscriptions grew 17 percent; trailing 12-month operating cash flow topped $13.5 billion; and engineered systems had 70 percent sequential growth in unit bookings.

And what about customers that are shifting to third-party clouds? Even there, Hurd claims, Oracle is winning. He notes that nine of the top 10 SaaS providers are powered by Oracle’s underlying technology.