Oracle Corp., a large software solutions provider, said on Monday that it would buy server maker and software designer Sun Microsystems for $7.4 billion. The move will help Oracle to more efficiently compete against both International Business Machines and Hewlett Packard, who can offer both hardware and software products.

“The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems. Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves,” said Larry Ellison, chief executive of Oracle.

There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industry's best-known brands and most widely deployed technologies, and it is the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracle's fastest growing business, is built on top of Sun's Java language and software. Oracle can now ensure continued innovation and investment in Java technology for the benefit of customers and the Java community.

“Our customers benefit as their systems integration costs go down while system performance, reliability and security go up,” added Mr. Ellison.

The Sun Solaris operating system is the leading platform for the Oracle database, Oracle's largest business, and has been for a long time. With the acquisition of Sun, Oracle can optimize the Oracle database for some of the unique, high-end features of Solaris. Oracle is as committed as ever to Linux and other open platforms and will continue to support and enhance our strong industry partnerships.

“Oracle and Sun have been industry pioneers and close partners for more than 20 years. This combination is a natural evolution of our relationship and will be an industry-defining event,” said Sun chairman Scott McNealy.

The board of directors of Sun Microsystems has unanimously approved the transaction. It is anticipated to close this summer, subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.

“This is a fantastic day for Sun's customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace. From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system and Sun's SPARC and x64 systems,” said Jonathan Schwartz, Sun’s chief executive officer.

Tags: Oracle, Sun