Speculation Abounds as Sun-Oracle Wedding Day Nears Page 2


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Pillar Data, NetApp and Spectra Logic

On a more speculative note, Layton said he has heard some whispers through the grapevine that Oracle may take the storage pieces of Sun — the file systems, Open Storage hardware, StorageTek and the rest — and combine them with Pillar Data, which is heavily funded by Larry Ellison. This could possibly result in a sizeable storage company.

"This entity would have a wide range of products on the hardware side, and would also have the power of developing and supporting some very powerful file systems," said Layton. "As storage continues to grow, this would allow Oracle to be a powerful player in this market, with some very smart people on their staff. If cloud computing takes off, Oracle will be well positioned to not only reap monetary benefits, but to also control its own destiny."

Layton is quick to add that he has no inside track on Oracle's plans and that all is speculative at this point.

Greg Schulz, senior analyst and founder of StorageIO Group, is another observer willing to take a shot at prognostication.

"The crown jewels in Sun's open storage lineup would be ZFS, MySQL software and associated applications/tools built around them," Schulz said.

He also drew attention to the way Sun packages its storage hardware to combine a large amount of dedicated storage with a server and Sun software. This leads him to believe that the software is probably more important for Sun and Oracle than the hardware, as you can find similar hardware from many other sources.

"Oracle could leverage the ZFS as part of a solution," said Schulz. "However, there is a bit of a potential sticky situation with NetApp."

He's talking about the fact that Oracle has historically been a NetApp (NASDAQ: NTAP) NAS customer, while Sun has been in litigation with NetApp over ZFS patents. Similarly, there have been a couple of spats over NFS, which Sun created and NetApp popularized.

"Maybe Oracle can make that litigation go away or strike some other deal," said Schulz.

On the vendor side, there are companies such as Spectra Logic that are already making use of open source storage offerings to reduce the cost and management complexity of their storage. How long will they be able to continue using Sun open source tools, though, is anyone's guess.

"Sun's open storage initiatives will likely be cut under Oracle's ownership," said Molly Rector, vice president of product management at Spectra Logic. "While Oracle has shown interest and dedication in Java development, the company probably doesn't consider the Sun's Open Storage initiative as strategic to its business."

Rector's logic: Oracle itself hasn't used open source to build its products and will likely leave the code to the open source community. Layton, though, counters that Oracle has been a good contributor to Linux.

"It will be interesting to see how Oracle will support the products that Sun has built using open source," said Rector. "If Oracle decides to end support for the hardware appliances with open source code, there will be an obvious hole that other vendors, like Spectra Logic, can move into and support."

Will Oracle Dump Sun Storage?

Oracle has said it plans to keep Sun's storage business, but some observers say Oracle could not only dump Sun's Open Storage efforts, but possibly much of the rest of Sun's storage portfolio too.

"Larry didn't buy Sun for its tape business and Sun hasn't executed well on StorageTek," said ESG analyst Steve O'Donnell. "If you have Sun tape, maybe it's time to look elsewhere."

Brian Babineau of ESG agrees.

"Oracle doesn't care about StorageTek," Babineau said. "I think they will sell it to someone else."

Peters, however, isn't so sure.

"Oracle as a company spends its day talking to users about applications, which are invariably talked about before storage — and that means adding the storage element to the conversation would not be the most difficult thing in the world," said Peters.

He points to other signs of vendor/stack consolidation around the market. As well as Oracle-Sun, there is Cisco's (NASDAQ: CSCO) UCS effort for example, as well as some of HP's (NASDAQ: HPQ) recent moves. Against this background, Oracle would find the addition of servers and storage potentially very interesting. Of course, the issue will be how Oracle balances that upside against the downside of upsetting some of its largest partners.

If Oracle doesn't keep the storage parts of Sun, though, Peters thinks it could well split the pie.

"The parts would garner more than the whole because different big potential acquirers would see more value by plugging holes in their lines," said Peters. "Aside from management buy-outs — and one would imagine money might be tough for that — then the only people who might realistically get involved would be the bigger storage players with money, the HP, IBM, NetApp, HDS types. But first, of course, we need the Sun-Oracle transaction to be final and to find out what Oracle's intentions are."

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