What Does Oracle-Sun Deal Mean for Government Contracts?

It's hard not to be impressed by the announcement yesterday: Oracle buys Sun Microsystems for $7.4 billion.

Says Oracle Chief Executive Larry Ellison: "Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."

The deal won't be a game-changer for the government. Though both companies provide computer servers and software and services to federal agencies, they compete against a bunch of other companies. "We still have a hugely competitive marketplace out there," Stan Soloway, president and chief executive of the Professional Services Council, said when asked about the deal.

But Soloway said the government will have to be on its toes to ensure it's getting the best price, and it's still going to have to work hard to make sure there's strong competition. There might be a temptation to go with the increasingly Big Oracle, which is aiming to be a sort of one-stop-shop for IT.

Here's what the AP reported not long ago:

"The deal would give Oracle ownership of the Java programming language, which runs on more than 1 billion devices around the world. Oracle also would take charge of the Solaris operating system, which already has been a platform for much of Oracle's products.

"It's far from Oracle's biggest acquisition during a four-year shopping spree that has cost more than $40 billion, but it may be the boldest. Oracle, a Redwood Shores, Calif.-based business software maker, will be branching more into data storage and computer hardware."

Government Computer News reporter Joab Jackson had this to say:

"While primarily known for its database software, Oracle has in recent years acquired more enterprise and infrastructure applications through purchases of other companies, such as PeopleSoft (which offered human resource management system software) and BEA Systems (application server and Web services tools).

"Sun Microsystems offers a wide range of hardware and software. On the hardware side, Sun offers components such as servers and storage units. Sun oversees the Sparc line of microprocessors, a multithreaded chip tuned for large-scale enterprise usage.

"On the software side, Sun oversees the Solaris operating system, the Java programming language and the MySQL database. Much of Sun's software has been placed under open-source licensing over the past few years.

"Government agencies, particularly those in the defense and intelligence communities, are heavy users of Solaris, especially Trusted Solaris and Solaris Trusted Extensions, both of which can be used for networks with sensitive classification levels."

This has got to have implications for the federal markets. Government Inc. wants to hear what you think.

By Robert O'Harrow |  April 21, 2009; 6:25 AM ET information technology
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It's well worth noting that in many cases, Sun was already the recommended platform for Oracle applications. As part of my employer's rollout of PeopleSoft, they have purchased an extensive amount of very high-end Sun hardware.

The big question: Will it become more cost-effective to deal with a single-source vendor, or will Oracle use it's new full-spectrum sales power to corner customers (especially government organizations) down a hallway for Oracle's benefit?

Another big question is what will happen to places where Oracle and Sun produce competing products or own interrelated intellectual property, as is the case with MySQL and the InnoDB storage engine?

Posted by: karlkatzke | April 21, 2009 11:15 PM

Posted by: Soluto | April 22, 2009 6:40 AM

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