This is the reason why I like working in the technology market. In the middle of the economic recession, there's still always exciting happen at the technology market. It's a market that never gets bored.
Oracle has been known for it's bold acquisitions. The company bought most of its major competitors in the business application market, People Soft, JD Edwards, Siebel, within 2 years. Then the year after, I remember seeing Oracle bought a company almost every MONTH! Do you see that happen in any industry? Some companies don't even close a major deal every month, let alone buying a company?
Well, after being in the industry for so long. I'm starting to get used to see these dog-eat-dog world . I don't get wowed easily anymore since Oracle's series of acquisition. But this latest announcement got my nose so close to the monitor, just to make sure I'm reading what I'm reading.
Of course, this deal was announced at one of the most interesting time of the market. There is probably never a better time to make major investment when the market is almost at its lowest deep. It is also announced in less than a week after IBM fail to close the deal with Sun. But what interest me the most from this announcement is that, Oracle is getting into Hardware business!
The enterprise software giant entering the hardware business could face with a lot of challenges. Can you imagine from managing developers to engineers? They could both be nerds, but the software developers are very different from hardware engineers. Also, hardware business involve managing manufacturing plants, components sourcing, distributions, logistics, managing inventory, which was never an issue for software companies.
OK, Maybe some people would say it's not surprising. Since the company announced its database appliance back in the fall, it is prepared for hardware business. All these challenges may even get Larry even more excited, because he just loves all the attention and spot lights he gets from making bold acquisition.
But I believe hardware is a retiring business. No matter how slit Netbook looks or how powerful is the Roadrunner (No.1 supercomputer built by IBM for US Department of Energy- http://www.top500.org/list/2008/06/100), I believe hardware is no longer a growing business. It will continue to exist, but eventually enterprises are not going to run data center at all. That's exactly what Cloud Computing or thin-client are all about.
The significance about Oracle getting into hardware actually proves my theory that hardware is passé. Sun has been struggling from its hardware-based business, margin is shrinking and growth has been stagnant. Apart from Sun, other hardware vendors major acquisition in recent years also indicates hardware can no longer be a standalone business: IBM bought PwC Consulting, sold its PC divisions and recently acquired Cognos, EMC bought VMware, HP bought ESD, all these indicates hardware vendors can only survive if it diversify its business into either software or services business. No hardware vendor will continue to survive in the market as a hardware vendor.
The only component that Oracle hasn't covered in the formula right now is IT services. My bet is Oracle's next bold move will acquire IT services companies. The question is, who is next?
Who do you think? Let me know.
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