Oracle acquired sun for for $7.4 billion, the acquisition strategy is basically adapted by giants to increase their market share and technology presence to cater the growing needs of their customers. Both Oracle and IBM always had an inclination in acquiring Sun because of various reasons like Java, Solaris, Mysql etc. We analysed how the acquisition would favour or disfavour oracle for various reasons below.
Table of Contents
Strengths in the Swot Analysis of Oracle Sun
- Both oracle and sun have very good product portfolio. After the acquisition they both had very strong product portfolio which are complementing each other in their hardware and software domains
- The relationship between the duo has been more than 20 years and there wouldn’t be much conflicts arising even after the acquisition
- Both Sun and Oracle have a very good brand equity in the industry
- The acquisition will lead to technology partnering resulting in Superior performance and innovative techniques
- Oracle’s deal with sun was worth around $7.4 billion. This imposes strong threat to Oracle’s competitors
- Expansion in customer base. After the acquisition strategy by Oracle , its customer base is likely to increase in both value and volume.
- E.g.: Google, yahoo, FB etc are the users of Mysql which is a product of sun
Weaknesses in the Swot Analysis of Oracle Sun
- Very soon after acquisition Oracle’s share price had a decline
- Every company has problem of uncertainty after acquisition on “how the company’s culture will be and the company’s procedure and policies will be?”
- This resulted a slowdown in decision making by both the customers and employees to have a strong commitment
- Open source- has major disadvantage as there are not version controls and the changes made by the developer cannot be tracked. This will result in difficulty to find which version is the latest one.
- The acquired company Sun has faced decline in profits and revenue since the FY2009
- There were reports of many uncertainties in hardware products
- Existence of Sun’s existing few products were in doubt after the acquisition and Oracle dint come out with a clear solution to Sun’s customers about their future technology partnering and relationship
Opportunities in the Swot Analysis of Oracle Sun
- Since both were pioneer in its own fields, the technology partnering can result in Pre-integrated software and hardware components which were complementing in nature
- This will reduce the deployment cost to customers and ease of operations to the company
- Fussion Middleware is showing good progress and its a good revenue generation system for the company
- Oracle can expand with Sun’s customer base
- The Asian markets are emerging; and there is a huge potential for growth in coming decades in Africa etc
- Acquisition will help in increase in their market share to become the leader of technology with richer technology mix
Threats in the Swot Analysis of Oracle Sun
- On the negative impact is that, the long term relationship between HP and Oracle are in trouble. HP and Sun Microsystems are direct competitor, and when Oracle acquired Sun it caused many negative waves in relationship climate between Oracle and HP as they joined hands with HP’s competitors
- Need for version control in open source
- There are lot of Grey markets in China, Korea which can result in duplication to a huge extent
- Current economic slowdown hit the IT industry
- It is also difficult to acquire new clients because of the economic slowdown as the clients will resist to change as the switching costs to other technology platform or up gradation of technology will incur heavy costs
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