Over the last few weeks, you could be forgiven for thinking that the Sun/Oracle merger was a done deal. Recent decisions by Sun’s shareholders to approve the deal, and the US government’s decision not stand in the way seemed to signal the end of the saga. But earlier this week the European Union dropped a bombshell by deciding to investigate the deal, particularly with respect to the acquisition of MySQL. It’s unlikely now that the deal will go through before January 2010 at best, and that’s not good for anyone. There are three possible outcomes, onoe of which is particularly attractive if you are Sun or Oracle (or a Sun customer):
- The EU eventually approves the deal, meanwhile Sun has been left twisting in the wind for the best part of a year, as it’s competitors steal one customer after another. IN just the past two quarters, Sun’s revenues have dropped 30% and 37% respectively which is little short of disastrous.
- The EU rejects the merger (and they’ve done that before, just ask GE). A rejection would leave Sun in an untenable position, it’s been hemorrhaging market share over the last few months, and it’s value to possible suitors such as HP would be dramatically reduced by a failed Oracle merger.
- The EU places conditions on the merger such as preventing Oracle from acquiring key software assets from Sun such as MySQL. Since it was the software that Oracle was after in the first place, this might make the whole deal unattractive to Oracle.
At best, this puts an ever bigger question mark over Sun’s future which can’t be good for their customers. So, whatever the final merits of the deal, I’m inclined to agree with Macbeth, “If it were done when 'tis done, then 'twere well It were done quickly.”
Posted by: Nik Simpson