Palash Acharya En No:0904106011 ID: 09-ITG-66

Oracles Acquisition of Sun Microsystems

A Case Study of ECOM

Palash N. Acharya 090410116011 Semester Vth Sardar Vallabhbhai Patel Institute of Technology, Vasad

Submitted to: Mala Mehta

E-Commerce & E-Business

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Palash Acharya En No:0904106011 ID: 09-ITG-66

Index
Title Page Certificate Introduction Company Profiles The Acquisitions The Challenge Competitive Positions The Synergies SWOT Analysis Factors Leading to the Merger The Final Outcome

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Palash Acharya En No:0904106011 ID: 09-ITG-66

CERTIFICATE
This is to certify that Mr. Palash N. Acharya ID NO: 09ITG66 EN NO. 090410116011 of programme TY IT A [5th Sem] has satisfactorily completed his term work in course E-Commerce and E-Business for the term ending in October 2011 Staff in Charge
Mala Mehta
Date:

Head of Department

E-Commerce & E-Business

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Palash Acharya En No:0904106011 ID: 09-ITG-66

INTRODUCTION
The case discusses the acquisition of Sun Microsystems by Oracle Corporation. It examines the growth strategies of Sun & Oracle over the years, their Product lines & their major competitors. The case then highlights the Problems faced by Sun post & Dotcom crash & examines its inability to monetize its Products. The case also describes the negotiation between IBM& Sun Microsystems for merging Sun with IBM. It analyzes the possible synergies between Sun & Oracle postmerger & the challenges that Oracle may face after the acquisition.

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Palash Acharya En No:0904106011 ID: 09-ITG-66

COMPANY PROFILES ORACLE CORPORATION Founders-

Ellison Robert Miner System Development Laboratories (SDL) 1977 Relational Software Inc. (RSI) 1979 Oracle Corporations. 1983

Company Name-

Products-

Competitors IBM Sybase Informix

Oracle RDBMS Products Version 1, 2, 3

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VISION OF ORACLE CORPORATION: and a Single Database. Simplify

-Speed Information Delivery with Integrated Systems Oracle adheres to 3 Principles: Standardize Automate Adhering to these 3 principles has saved

Oracle more than US$1 billion in operating costs-so far.

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SUN MICROSYSTEMS Founders Andreas Bechtolsheim Vinod Khosla Company Name Scott McNealy Stanford University Network (SUN) 1981 Products Variety of Workstations (1989) Scalable Performance Architecture (SPARC) station 1 Low end Workstations PC Class Servers Opensolaris Subsidiaries SunSoft

Low cost SPARC system Sun Federal Sun Technology Enterprise Dotcom

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Palash Acharya En No:0904106011 ID: 09-ITG-66

Customers Commercial users like Insurance Companies, Telecom, Brokerages, Publishers & Airlines. Sony, Motorola, Alcatel, Ericsson, Samsung, BEA System. VISION OF SUN MICROSYSTEMS: The Network is The Computer MISSION OF SUN MICROSYSTEMS: Building Internet Infrastructure. OBJECTIVES OF SUN MICROSYSTEMS: To get more Profit, To provide better internet infrastructure, To get more market share in servers market.

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THE ACQUISITIONS
Companies in the race: IBM HP Dell Cisco Oracle at last came up Time consuming negotiation between IBM & Sun occurred, but later, the acquisition between Sun & Oracle happened by paying US $9.5 a share in cash on April 20, 2009. THE CHALLENGE

Profit Expectation

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Palash Acharya En No:0904106011 ID: 09-ITG-66

COMPETITIVE POSITIONS

Market Sales (%)

Sun Microsystems

Dell, 11.6 HP, 29.5

IBM, 31.4

IBM HP Dell Sun Microsystems

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THE SYNERGIES: Oracle did not have major product overlaps with Sun. Cross-selling of Products Oracle used Suns Java to develop many of its applications. Adding MySQL to its sphere helped Oracle to cater to low One stop Shop end DBMS user also

Help Oracle to diversify its product lines & risk R&D Staff & Sales Team combination

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SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate the Strengths Weaknesses Opportunities Threats Involved in a project or in a business venture. SWOT Analysis involves specifying the objective of the business venture or project and identifying the internal and external factors

STRENGTHS
1.More customers world wide 2.Sun has 10.6 % market share in server markets. 3.Better R&D staff 4.Better sales Team 5.Strong Product Quality 6.Loyal customer

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WEAKNESS
1.Cultural Differences. 2.SUNs Debt 3.Reduce Manpower

OPPORTUNITIES
1.Fourth Largest Company 2.Reduce R&D expenditure 3.More choice than before from the same vendor 4.More commodity servers

THREATS
1.More Competition. 2.Profit Maximization

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FACTORS LEADING TO THE MERGER Strategic Operations: Both companies tend to come up with products that are cheaper than most other competitors provide. Products are complementary. Targeted to Java users. Both companies are top leading in their own markets, so they have good knowledge about their organization & their respective best staff. Managerial expertise to understand threats & opportunities: Sun having better R&D Staff Oracle has a better Sales team Brand Name, Reputation & Goodwill: Both are reputed companies in the Market Organizational Cultural Resources: Both companies have different and varied Culture & hence a wider perspective.

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THE FINAL OUTCOME

Oracle acquired Sun Microsystems because Sun was facing a great loss due to the Sunsoft & Dotcom Crash. Among various companies in competition viz. IBM, HP, Dell, Cisco, Oracle, and an explicit criteria of maximum profit, Oracle emerged victorious because of its Suitability, or better called Feasibility with Sun Microsystems, and in a way, benefiting both the organizations, the Merger was finalized in 2009. .

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