Today marks the end of a protracted and difficult delay of Oracle's acquisition of Sun. Change in Control from Sun to Oracle was announced when stock trading opened at 9:30am PST. I now work for Oracle Corporation. I am told this will put the swagger back in my step.
The industry press has had a field day (er, make that 281 days,) tracking this mega acquisition. Amid the storm of speculation about what this newly forged titan will bring to the the world of IT, InformationWeek's Bob Evans yesterday surmised Ellison's motivations for the acquisition in a nice Top 10 List. For my part, reason #8 on his list is the most compelling:
To rattle the tech industry and force a series of changesI would say that Larry's words here are prescient, except that Scott McNealy had been saying the same thing to Sun customers for years: (paraphrasing,) "You can build a jalopy from parts, or you can buy a fully integrated vehicle from Sun". Ellison's and McNealy's value propositions are essentially identical. The principal difference stands to be in the execution against that value proposition. In his farewell email to Sun employees yesterday, McNealy said it all: "Sun innovated like crazy." No mention of integrating like crazy in that memo. Sun barely scratched the surface of potential for integration across it's vast portfolio of technology. Sun's products were just that - products. Solutions were left as an exercise for the reader. Making it all work seamlessly was someone else's job. The deep conviction among many leaders at Sun was that, with such obvious potential, surely an army of entrepreneurs and VAR's and ISV's and system integrators would come rescue these technologies from obscurity by combining them with other technologies. And they did. Just check Sun's patent portfolio to see how much of it is embedded in the products and services of thousands of companies. But the primary point of monetization for these technologies did not lie with their inventor. For Sun, the real money was made in the perpetuation of jalopy building by Sun's customers' IT departments, those money pit cost centers of the corporate world. Larry's vision for integration preeminence is a timely redux of McNealy's, tantamount to tearing down the traditional IT department. God Speed You Fair Emperor. May CIO's rattle their swords with you, not against you. I am personally very conflicted by the profound implications of all this rattling. On the one hand, I, like many of my colleagues who work with customers day in and day out, had become quite proficient in guiding the jalopy building. Further, many of my customers are not only jalopy builders by choice, their jalopies happened to be running some of the most innovative and popular services known as Web2.0. But, Sun's lesson from trying to supply IT infrastructure to this "red shift" Web2.0 market was that there's no money in it. (There were flaws in the analysis that led Sun to believe Web2.0 was an under served market ripe for Sun's reapers, while corporate IT was an over served market shriveling on the vine. The flaws were exacerbated by assumptions about operational competencies we didn't have - there were plenty of white boards in Sun Marketing that looked like a Sidney Harris cartoon. Maybe Marketing was following the CTO's lead, while the CTO was following Marketing's lead, neither the wiser.) Meanwhile, Oracle figured out that there is good margin in supplying highly differentiated and well integrated solutions to large enterprises, and even better margins when you can do it on your own terms. So, it seems logical to let Dell and HP battle with SuperMicro and Computers-R-Us over the 1% margin on every server sold to the jalopy builders, while Oracle goes after those who eschew the assembly and integration. I'll miss serving the jalopy builders, because it means I'll be somewhat more removed from delivering on the altruistic promise of the Internet - that great level playing field, where the rising tide floats all boats. And, nearly indistinguishable from the promise of the Internet, is the promise of Open Source. I can only assume my new job duties will recede too from the transformative power and nuance of Open Source. On the other hand, Oracle knows a good value proposition when it hears one. One of Sun's value props was Low Barrier to Exit. Entrepreneurs should not take this one to investors, but it resonated well with Sun's customers, and especially with those mutual customers served by Oracle and Sun. Sun worked hard to put this on customers' scorecards and into their RFP's. Oracle will not score well on this criteria. The trick with a good value proposition, I've learned, is that it needs to work for both the customer and the supplier. Oracle gets that. Oracle revenue derives, in large part, from an architectural sale. Especially at the level of business architecture, a.k.a., Enterprise Architecture. I really enjoy the practice of enterprise architecture, yet rarely found the opportunity to do it at Sun. Solving complex challenges across a range of stakeholders is just not the way to sell servers. The notion of "Solution" at Sun stood on shifting sand. Oracle's track record leads me to believe I'll have the opportunity to practice enterprise architecture, mapping a rich and stable portfolio of solutions to customers' business challenges. I've grown a lot personally and professionally over the course of 15 years at Sun on three tours of duty. Oracle's acquisition of Sun, and the roller coaster ride it triggered, was perhaps the single most important growth experience for me because it challenged many of my long held beliefs. It's been sobering to accommodate certain lessons into my views on work, technology, and economics. The stubborn primacy of shareholder return. The incompatibility of altruism with managing the indomitable corporate bottom line. I thought Sun was a sufficiently successful and influential economic engine to move the needle on things like a more comprehensive bottom line that accounts for social and environmental profit and loss. I'd like to think it did, for a while. Sun took it's inescapable role as shepherd of technology with some sense of responsibility to society, and particularly the developing world and those on the other side of the digital divide. Turns out that much of that altruism was working against Sun's obligation to its shareholders and, ultimately, against the success of Sun. As Hemingway wrote, The Bill Always Comes. At Sun the inspiration:perspiration ratio favored the tinkerer and researcher. At Sun, to err on the side of transparency and integrity was more than de rigueur, it was constant. This made Sun a cool place to work for an altruistic technologist like me. Oracle, like many Silicon Valley companies, share certain of these values. I have hope that, by virtue of the Sun acquisition, even more of these values can thrive at Oracle. If I continue the journey through this next chapter as employee of Oracle, I expect it will involve a transformation from altruistic technologist to pragmatic technologist ... with altruistic swagger. I'll let you know how that goes.
based on Ellison's own terms. In public comments, Ellison castigated the IT industry for dumping assembly and integration work on customers who have no desire to be assemblers and integrators, and intimated that his newly constituted company would force a major change in that model: "We've treated customers like computer hobbyists—go buy an operating system, go buy some network software and routers and a database and some applications and hire a lot of programmers and—we've been selling components. It's what Andy Grove referred to as 'the horizontal computer system'—by the way, I think Andy Grove is a brilliant guy—I just think he's fundamentally wrong. He believed the right model is everyone is specialized in one area—you make memory chips or you make microprocessors—but at some point somebody's got to be the integrator, and the question is, is the integrator IBM Global Services, or is the integrator a systems company like Oracle/Sun, where the database and the hardware and the networking and the middleware and the applications all work together, and we believe that the right place to integrate is at the engineering level, not what IBM Global Services is trying to do, which is to integrate at the consulting-service level." Any CIOs out there want to push on Ellison to let you keep all that cool assembly and integration work??
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