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

Oracle’s 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 E-Commerce & E-Business Page 2 .

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 Page 3 .Palash Acharya En No:0904106011 ID: 09-ITG-66 CERTIFICATE This is to certify that Mr. Palash N.

It analyzes the possible synergies between Sun & Oracle postmerger & the challenges that Oracle may face after the acquisition. The case also describes the negotiation between IBM& Sun Microsystems for merging Sun with IBM. 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. E-Commerce & E-Business Page 4 .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.

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 E-Commerce & E-Business Page 5 .

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. E-Commerce & E-Business Page 6 .Palash Acharya En No:0904106011 ID: 09-ITG-66 VISION OF ORACLE CORPORATION: and a Single Database.

Palash Acharya En No:0904106011 ID: 09-ITG-66  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 E-Commerce & E-Business Page 7 .

Palash Acharya En No:0904106011 ID: 09-ITG-66 Customers Commercial users like Insurance Companies. To get more market share in servers market. Ericsson. Telecom. To provide better internet infrastructure. Motorola. Publishers & Airlines. Brokerages. Samsung. E-Commerce & E-Business Page 8 .  Sony. VISION OF SUN MICROSYSTEMS: The Network is The Computer MISSION OF SUN MICROSYSTEMS: Building Internet Infrastructure. OBJECTIVES OF SUN MICROSYSTEMS: To get more Profit. Alcatel. BEA System.

but later. THE CHALLENGE  Profit Expectation E-Commerce & E-Business Page 9 .Palash Acharya En No:0904106011 ID: 09-ITG-66 THE ACQUISITIONS  Companies in the race:  IBM  HP  Dell  Cisco  Oracle at last came up Time consuming negotiation between IBM & Sun occurred.5 a share in cash on April 20. the acquisition between Sun & Oracle happened by paying US $9. 2009.

Palash Acharya En No:0904106011 ID: 09-ITG-66 COMPETITIVE POSITIONS Market Sales (%) Sun Microsystems Dell. 29. 11.5 IBM.4 IBM HP Dell Sun Microsystems E-Commerce & E-Business Page 10 . 31.6 HP.

 Cross-selling of Products  Oracle used Sun’s Java to develop many of its applications.Palash Acharya En No:0904106011 ID: 09-ITG-66 THE SYNERGIES:  Oracle did not have major product overlaps with Sun.  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 E-Commerce & E-Business Page 11 .

Strong Product Quality 6. 3.Palash Acharya En No:0904106011 ID: 09-ITG-66 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.Better sales Team 5.Loyal customer E-Commerce & E-Business Page 12 .More customers world wide 2.Sun has 10.Better R&D staff 4.  SWOT Analysis involves specifying the objective of the business venture or project and identifying the internal and external factors STRENGTHS 1.6 % market share in server markets.

More choice than before from the same vendor 4.Cultural Differences.Palash Acharya En No:0904106011 ID: 09-ITG-66 WEAKNESS 1.More commodity servers THREATS 1.More Competition.Reduce R&D expenditure 3. 2. 2.Fourth Largest Company 2.Profit Maximization E-Commerce & E-Business Page 13 .SUN’s Debt 3.Reduce Manpower OPPORTUNITIES 1.

 Managerial expertise to understand threats & opportunities:  Sun having better R&D Staff  Oracle has a better Sales team  Brand Name. E-Commerce & E-Business Page 14 .Palash Acharya En No:0904106011 ID: 09-ITG-66 FACTORS LEADING TO THE MERGER  Strategic Operations:  Both companies tend to come up with products that are cheaper than most other competitors provide. Reputation & Goodwill:  Both are reputed companies in the Market  Organizational Cultural Resources:  Both companies have different and varied Culture & hence a wider perspective.  Both companies are top leading in their own markets.  Targeted to Java users.  Products are complementary. so they have good knowledge about their organization & their respective best staff.

Oracle. benefiting both the organizations. .  Among various companies in competition viz. or better called Feasibility with Sun Microsystems. HP. and an explicit criteria of maximum profit. and in a way. E-Commerce & E-Business Page 15 . Oracle emerged victorious because of its Suitability. the Merger was finalized in 2009. IBM. Cisco. Dell.Palash Acharya En No:0904106011 ID: 09-ITG-66 THE FINAL OUTCOME  Oracle acquired Sun Microsystems because Sun was facing a great loss due to the Sunsoft & Dotcom Crash.