Oracle buys Sun for $7.4B

Oracle, known for its database business, has announced today that it will buy Sun Microsystems for$9.50 per share in cash. The valuation of the deal is $7.4 billion, or $5.6 billion net of Sun’s cash and debt. Weeks ago IBM approached Sun for a buyout, but Sun rejected IBM’s offer because they did not like the terms IBM was offering.

Sun brings several benefits to Oracle through the acquisition. First off, Oracle has not had a hardware or server OS business to date and this is the area of IT where Sun earned its reputation during the dot-com boom. In addition to hardware, Oracle’s most important product to acquire is Sun’s best-know technology: Java software. Java is the most important software Oracle has ever acquired because it’s one of the computer industry’s best-known brands and most widely deployed technologies. Java is also critical to Oracle because its fastest growing business, Oracle Fusion Middleware, is built on Sun’s Java language.

Another important product Oracle acquires with Sun is Solaris, the successful platform for Oracle’s database business; which is Oracle’s largest business. Acquiring Sun’s two key software assets will ensure Oracle continued innovation for the benefit for the customers.

Oracle is mainly focused to tackle large-scale business intelligence problems along with Sun and its enterprise servers and server software. If you are a small business or medium sized business, you would probaly be more interested in tower servers.

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