Oracle & Sun – A new Sunrise?

Andreas Zilch

Everybody was waiting for the latest news on how the Sun acquisition impacted Oracle’s quarterly numbers. And Oracle announced better-than-expected financial results for the fourth quarter of 2010, fueled by the Sun acquisition and strong hardware sales. The company reported earnings of $2.4 billion, or 46 cents per share, on revenue of $9.5 billion. Operating profit from Sun contributed about $400 million in non-GAAP operating income, and fiscal year 2010 sales from Exadata machines is fast approaching $1 billion, Oracle executives claimed. Oracle's CFO stated Sun had $1.2 billion in systems revenues.

But Oracle's claims about Sun's sales are a mixed statement. Oracle failed to report that comparable Sun hardware sales in last year's quarter were $1.3 billion for servers and $570 million for storage while its gross margins were approximately 42 percent. Oracle did make improvements in the hardware production and delivery process but the news was not as strongly positive as presented. IT executives should take Oracle's claims with a bit of salt and base decisions on whether or not to utilize Sun hardware or Exadata database engines upon current and long-term enterprise requirements and vendor roadmaps and strategies.

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