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Oracle is likely to sell Sun's hardware business to HP

Ellison is bluffing
Fri Aug 28 2009, 11:49

IT IS LOOKING increasingly likely that Oracle is going to sell Sun's hardware business to HP.

While Oracle's Larry Ellison has made it no secret that he only wants Sun for its software, he has denied planning to sell off the outfit's hardware business.

However a CNN deep throat apparently has revealed that talks between Oracle and HP are going ahead.

Ellison didn't really want Sun's hardware business in the first place, and probably wants it even less now, particularly as it is not doing all that well and it makes the finances of the deal look less attractive.

However he has been putting on his best spin lately. Ellison said that he can use Sun's server business to build appliances custom-tuned to run Oracle software. However that doesn't seem to be such a great plan.

HP, on the other hand, wants Sun's hardware to boost its services business. HP bought outsourcing player EDS. EDS was Sun's best customer. By owning Sun technology, HP will improve its profit margins on many EDS deals.

HP told CNN that the EDS integration process has gone well and the subtext is that the maker of expensive printer ink is fine with writing a big cheque to Ellison.

Ellison watchers know that when he has a cunning plan in mind he has no problem about spinning stuff to the media. The Peoplesoft and BEA Systems deals showed he was willing to bluff.

By making the world plus dog think he is not interested, he makes HP think it will have to add a bit more money to make the deal.

The fact that CNN is certain that negotiations are ongoing means that it is fairly clear HP is pushing and Ellison is playing a bit hard to get about getting rid of that red-headed stepchild he accidentally bought. µ



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