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Sun, Oracle to Get Tighter
By Clint Boulton

January 6, 2006

As if the two weren’t tight enough after 20 years, Sun Microsystems CEO Scott McNealy and Oracle CEO Larry Ellison will hold a special employee meeting Tuesday to discuss the “next phase” of the companies’ alliance.

Details of this enhanced relationship are murky, but Sun made a point of describing the meeting as a “reinvigorated relationship, not a merger or acquisition” in a statement.

McNealy and Ellison will discuss the “importance of Java and Oracle’s commitment to Java, Oracle’s new multi-core pricing and going to market together to expand adoption of Oracle and Sun technologies.”

An Oracle spokeswoman told internetnews.com: “Unfortunately neither company will be offering comment until the event itself, when Larry and Scott are on stage.”

A Sun spokesman said the event will not be “news-driven” but alluded to the unpredictability of McNealy and Ellison, who are slated to speak at 2 p.m. PDT at the Oracle Conference Center in Redwood Shores, Calif.

“It’s a celebration of a 20-plus-year partnership and a chance to hear two CEOs talking about the relationship between the two companies and the future direction of the partnership,” the spokesman said. “That said, you still never know what Larry and Scott will say once they’re on stage.”

What is known is that Sun and Oracle have been ramping up their partnership at a brisk pace in the last few months.

In November, the companies announced that Sun’s open Solaris 10 operating system would be the preferred 64-bit application development and deployment platform.

A few weeks later, Oracle President Chuck Phillips joined McNealy onstage at Sun’s UltraSparc T1 server launch to say that Oracle will cut its licensing fees by charging users on a processor factor of .25 for each UltraSparc T1.

What could the next step be?

Oracle has been devouring applications vendors at a prodigious pace. Sun has also been padding its portfolio with buys and releasing new computing machines to help customers consolidate workloads.

Pund-IT analyst Charles King, who viewed the invite from Sun, said the mention that the meeting would not be a merger was interesting in itself.

Instead, King said Oracle and Sun could pledge to start working more concertedly together to make Sun systems the environment of choice for delivering Oracle services and applications.

After all, Sun would love to be the preferred OS and hardware provider for the so-called Web 2.0. On the other side of the coin, King said Oracle’s application frenzy dovetails nicely with some of the goals of the large server vendors, such as Sun, IBM and HP.

“With its acquisition strategy, Oracle is actively moving from being considered purely as a database provider into becoming an application service provider headed in the same direction that all of the big system vendors seem to be headed,” King told internetnews.com.

“This is the eventual future where the hardware, operating system and big pieces of middleware like the database and Web servers are the infrastructure for delivering business services and applications.”

Regardless of what Ellison and McNealy say, Sun and Oracle make a sound united front — applications, operating system, and oodles of middleware — against a number of larger vendors, such as IBM, Microsoft and HP.

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