Oracle-Red Hat Acquisition Rumors Swirl After Reports Surface

Oracle might be eyeing additional acquisition, and some analysts suspect that the IT giant might have its sights set on Red Hat. This week, a report surfaced that claimed an Oracle-Red Hat merger might “[make] sense.” Even as the note cautioned that the acquisition wouldn’t happen “now,” other reports have Oracle and Hewlett-Packard recently in unsuccessful talks to snatch up Sun Microsystems.

Oraclemight be gearing up for another of highly public acquisitions and this time the IT giant might have its eyes set on open-source innovator Red Hat. This week, an analyst suggested that an Oracle acquisition of Red Hat is "eventually highly likely."

Although Oracle and Red Hat are not speaking about these reports, it generated enough buzz to warrant stories and additional speculation. Stories about a possible IBM-Sun Microsystems merger also helped push the Oracle-buys-Red Hat story line.

"It would make sense for Oracle to own Red Hat ultimately," Katherine Egbert, an analyst with Jefferies & Co., wrote in a March 23 research report, "but given IBM's potentially pending acquisition of OpenSolaris and Oracle's history as a value buyer, the time does not seem right."

"While we think an Oracle purchase of Red Hat is eventually highly likely, we think it's premature," Egbert added, "in part because of [IBM's] highly publicized interest in [Sun Microsystems] and the pursuant uncertainty around whether IBM would continue to be an advocate for RHEL once they owned both AIX and Open Solaris development, and in part because Oracle does not have a history of purchasing still-fast-growing competitors."

Shares of Red Hat rocketed upwards on March 23, at least partially thanks to the rumors, only to fall off slightly on March 24.

Oracle seems to have been a buying mood lately. According to eWeek’s Storage Station blog, which quoted two "excellent sources," Oracle was recently ready to make a joint move with Hewlett-Packard to purchase Sun Microsystems for a combined deal worth somewhere between $6 and $7 billion.

For $2 billion of that, Oracle supposedly wanted Sun’s software library, including Java, ZFS, Glassfish, Solaris, OpenSolaris, and OpenOffice.org (HP would have paid $4 to $5 billion for Sun’s hardware). Sun, however, declined the offer.

Oracle has circled Red Hat before. Way back in 2006, the acquisition rumor mill geared up to a furious pitch after Oracle CEO Larry Ellison started making comments about stepping in to provide Red Hat’s support. At the time, analysts suggested that such a move would be unlikely, given Red Hat’s relative expense.

Speculation has continued since then, along with the assumption that a robust Red Hat would be a bit too large for Oracle to comfortably acquire, monetarily speaking.

Oracle has been displaying some robust health itself, despite the global recession, with its third-quarter fiscal 2009 earnings per share up 3 percent over the same quarter last year.

On March 23, Oracle announced the acquisition of Relsys International, which provides drug safety and risk management solutions with advanced analytics. The purchase allows Oracle to bolster its suite of software applications targeted at the health care IT field.

Even before that, analyst Katherine Egbert suggested that Oracle could acquire SMB (small midsized business) server virtualization specialist Virtual Iron Software, as part of a play that would allow it to effectively compete with VMware and Citrix Systems in the virtualization products arena.

Oracle purchased mValent in its first acquisition of 2009, gaining that company’s configuration management solutions for potential use within Oracle Enterprise Manager.

Author: Nicholas Kolakowski @ www.eweek.com

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Oracle Announces Relsys Acquisition

Oracle has signed an acquisition agreement with Relsys, a provider of drug safety and risk management solutions for the health sciences industry. The combination will support end-to-end drug safety processes across clinical development, post-market surveillance and patient care.

The acquisition will bring significant domain knowledge and experience to Oracle's health sciences global business unit, and is expected to extend Oracle's leadership in providing drug safety applications to the health sciences industry.

The transaction is subject to customary closing conditions and is expected to close in the first half of calendar year 2009, said a company statement.

"With the addition of Relsys, Oracle is uniquely positioned to help our customers improve drug safety by delivering a comprehensive software solution that enables our vision of integrated safety and risk management supported by advanced analytics," said Neil de Crescenzo, SVP and GM, Oracle Health Sciences.

Relsys provides solutions support for adverse event reporting, risk management, and data analysis for pharmaceutical, biotechnology, contract research organizations and medical device companies worldwide.

Source: www.cxotoday.com

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Oracle Offering Scaled Down Version of Database Machine

Citing customer demand, Oracle has unveiled a half-size version of the HP Oracle Database Machine, its competitor to high-end data warehousing products such as that sold by Teradata. Oracle claims strong demand for its Exadata product line but declines to offer numbers. The HP Oracle Database Machine was co-developed by Oracle and Hewlett-Packard and is part of Oracle's Exadata product line, launched to great fanfare at the OpenWorld conference last year. It initially was available as a rack filled with eight HP DL360 database servers, four Infiniband switches, a storage server grid with 14 servers, and various software products, according to a post made on Thursday to Oracle's Data Warehouse Insider blog.

But now, "due to popular demand, addressing smaller entry points with the same extreme performance on the same technology basis, Oracle is now introducing a smaller system," the blog states. The scaled-down version has four HP DL360 database servers, two switches and seven storage servers and "will provide similar scalability and performance characteristics as the full rack."

"We at Oracle, and our customers, are very excited about this new offering, as it provides a slightly lower entry point for an HP Oracle Database Machine, while still delivering extreme performance," the blog adds.

CEO Larry Ellison dubbed the Exadata line the company's most exciting product family "in many, many years," during an earnings conference call this week, and claimed that the system's performance has been trouncing competitors' products.

But while Oracle President Charles Phillips described the Exadata sales pipeline as "the largest [he's] ever seen in terms of a new product," neither he nor Ellison provided any definitive numbers.

While Exadata promises high-end performance, it has a considerable price tag as well. Oracle's official price list states that the half-sized machine's hardware costs $350,000 (about Rs.1,750 lakh) compared to $650,000 (about Rs. 3,250 crore) for the full version.

But analyst Curt Monash has calculated that once software licenses and likely database options are added to the equation, the list price of a fully loaded, full-sized Database Machine is more than $5.5 million (about Rs. 27.5 crore).

Despite that price tag, it's hard to draw conclusions about the product's success so far, Monash suggested.

While Exadata "is not winning many competitive deals yet," he said, "whether they are making sales into the Oracle loyalist base is a different matter."

Oracle's decision to release a half-sized version is an acknowledgment that in the data warehousing market today, "there's much more unit demand at lower database sizes," Monash said.

The full database machine has either 20TB or 45TB of storage, depending on the type of drives used, according to Oracle's blog post.

Meanwhile, "most specialized analytic DBMS installations run databases under 10TB in size," Monash said.

"Big enterprise data-warehouse integration projects are in some cases being deferred for economic reasons," he added. "Smaller, more tactical projects with rapid payback are less affected."

Oracle is hardly abandoning the type of enterprise that would need the full Database Machine, according to Monash.

"Their most important customers are the biggest and highest-end ones," he said. "For years, Teradata was the only vendor who routinely clobbered Oracle at the high end of the database market. Now Netezza and others are also threats. Exadata is Oracle's reaction. The last thing Oracle wants to do is sacrifice share at the top of the DBMS market. All other objectives are secondary."

Author: Chris Kanaracus @ www.cio.in

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