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First of all, please ignore the fact that I work for SAP. The following are my personal views based on almost 30 years in the IT industry and should certainly not be taken as based on any SAP official position.

I used to work for a hardware vendor. It was called DEC when I joined it and Digital when I left. It was bought by another company and then by HP. My first SAP exposure was as part of Digital’s SAP competence  centre, where my job was to help the hardware salespeople convince potential SAP customers that they should use Digital hardware. 

Because I worked for Digital, in the mid-90s I used to care about what hardware customers would chose. I really believed that Digital’s operating system was the best choice at the time. Then I joined SAP the organization and become “hardware and database  agnostic” – as long as it was SAP’s products that were being bought, I didn’t care what combination the customer used.

The situation nowadays is a bit different. First of all, we have Windows as a platform. The natural choice here is SQL Server. Then there’s IBM as a platform, which tends to be using DB2 as the database of choice. The other Unices (old Latin habits die hard) tend towards Oracle. Please note, I am not quoting any sort of official numbers, just my gut feel from 400+ students who come through my training courses a year.

So, if Oracle buys Sun, what does it mean? Some analysts are suggesting doom and gloom for SAP. They think that Oracle as a one  stop shop will mean fewer SAP sales and implementations.

I think they misunderstand why people buy software solutions. It isn’t to find something to run on the hardware they bought. Despite what some techies think, the hardware is there to support the software, not the other way round. OK, so if I choose Sun as my hardware platform, probably the salesperson will do a deal for the database to run, but does that lead to “and by the way, why not buy Oracle’s ERP solution”? I don’t think so. The hardware choice is mostly done after the software selection, not before.

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  1. Nigel James
    Way back when in the days before thumb drives but sometime after punched cards as wise old self taught developer asked me when I asked him what computer I should buy “What are you going to run on it?”

    The question is still valid now.

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  2. Ignacio Hernández
    Hi Michael
    in current economic situation new Oracle/Sun could sell its hardware/OS/DB/middleware and development solutions in a package and give as a gift to customers the ERP, SAP could not compete to that.
    Regards,
    Ignacio.
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  3. Vijay Vijayasankar
    Oracle can offer better prices for customers who bundle hardware and software in their purchases from them – so that could sway some decisions.

    Plus, apart from the hardware play – Oracle could also do some damage to SAP in theory by tweaking java in some way that makes it hard for SAP to use. I don’t think they will do that – and in any case, we can only speculate on their motives till they actually “do” something.

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  4. Stefan Koehler
    Hello Michael,
    the deal will have the most impact on OS/Hardware vendors like IBM.

    Why would a customer benefit from the acquisition?
    * Hardware/OS/Application sales from one point (greater sales return and allowance)
    * OS specific implementation for the oracle database or other products to improve performance or other things (like Micrsoft did with the MSSQL on Windows)
    * Reduced license prices for oracle products on Sun OS (as far as i know this was already available before oracle do this acquisition)

    Don’t think only on SAP / Oracle ERP applications .. there are many other applications that require an oracle database and these database also need a platform which maybe independent from the application (and so the combination of SUN Hardware/OS and an oracle database maybe the cheapest).

    In my opinion SAP should be more worried about its customer loyalty and its price policy (support and what you get of it) …. new customer (medium-sized businesses) should think about other alternatives (for example by Oracle), because it is much cheaper in the whole pack (Server/Database/Application).

    Regards
    Stefan

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  5. Alberto Castillo
    Yes, it is true that Hardware is there to support software but Hardware price will also play a key roll when deciding the best option in terms of performance/support/price. SUN hardware is usually most expensive than IBM,HP and DELL to mention only this and small to medium companies will find this a major key desition point. So what about Oracle/SUN giving a good combo price for their solutions? then companies will be tempted or probably the desition will be a matter of personal taste of the IT managers because I know some IT managers that won´t buy a SUN hardware because they had bad experiences in the past.
    If IBM and SAP for example begins an aggresive marketing agenda, then Oracle/SUN won´t have such and advantage or Microsoft and SAP could create software “combos” to take down Oracle/SUN prices…
    What if… will be endless so we can only speculate, just the time will tell…
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  6. Peter Nieuwmeyer
    This deal is all about Software not hardware. More specifically about Java and MySQL. Oracle has a big investment in Java and an interest in ensuring that MySQL does not impact their database sales too much. I think Oracle will try to sell the hardware assests, although they will struggle, there is little value left in the SPARC architecture.
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