Microsoft could be a winner in Sun-Oracle deal

From InfoWorld: Microsoft has had few critics more vocal than Oracle CEO Larry Ellison and Sun Chairman Scott McNealy. With their companies set to merge in a blockbuster $7.4 billion deal announced Monday, is it time for Microsoft to worry?

If Oracle retools itself as a systems vendor, as it suggested that it might, that could put pressure on server vendors such as Dell and Hewlett-Packard to cozy up more with Microsoft, which does not operate a competing hardware business.

"Historically, [Oracle] has been a major partner for HP, given HP's lack of a large software business," wrote Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co. "Going forward, we believe that HP is likely to push alternatives to [Oracle] when possible, given that they are now direct competitors in the hardware space."

If hardware divisions at Oracle partner companies feel threatened by the deal, it could be bad news for Oracle's software business, according to Miko Matsumura, a former Sun executive who is now deputy chief technology officer at Software AG. "The hardware business is king, and anything that threatens that becomes your mortal enemy," he said.

Matsumura believes the deal could drive HP into a tighter relationship with Microsoft as Oracle tries to work through the massive acquisition. "In the midterm, I think it [will be] a big bloody mess," he said of the deal. "I think HP is going to steer clear of Oracle."

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