Customers are delaying purchases of new servers from Sun Microsystems because of uncertainty created by Oracle's pending US$7.4 billion acquisition of the company, Avnet CEO Roy Vallee told an investor conference in New York Thursday. Vallee's comments are the latest evidence that the acquisition, which is being held up by an antitrust inquiry by the European Commission, is having a negative impact on Sun's customers and channel partners. On Thursday, Oracle paid for a front-page advertisement in The Wall Street Journal in which the company vowed to maintain Sun's hardware product lines and spend more money than Sun does today developing the company's Sparc-based servers and Unix-based Solaris operating system. The ad even quoted Oracle CEO Larry Ellison [pictured] as saying, "We're in it to win it. IBM, we're looking forward to competing with you in the hardware business." Vallee, speaking at the 2009 Citi Technology Conference in New York, said companies are delaying buying replacements for aging servers made by Sun because of uncertainty surrounding the proposed acquisition. He said that while IT managers have been delaying server purchases overall because of the recession, the trend has been more pronounced with Sun servers given that many customers remain unsure about Oracle's plans for Sun's hardware unit. "Customers are wondering what the product road maps are going to be and if they commit new capital, can they be confident about where Oracle is going to take the company post-acquisition," Vallee said, according to an audio Web rebroadcast of Vallee's comments. Last week, market researchers Gartner and IDC issued reports on second-quarter server sales that showed Sun taking a beating. Gartner calculated that Sun's server revenue dropped 36.2 percent in the quarter compared to the same period one year earlier while IDC put the sales drop at 37.2 percent. That compares to a 30.1 percent drop in server sales industrywide during the quarter. Oracle announced the deal in April to acquire Sun, a somewhat surprising move given that Oracle is almost exclusively a software vendor. That's led to speculation that Oracle may be buying Sun for its software products, including Solaris and the MySQL database, and might shut down or sell off Sun's hardware operations. Sun customers and channel partners have complained that they have heard little from Oracle about its plans for Sun's hardware and some Sun resellers have been hedging their bets by taking initial steps to resell competing products from IBM and Hewlett-Packard. See original article on CRN.com
Issue: 277 | March, 2010