In case you missed it Oracle announced this morning that it will be acquiring Sun Microsystems. The transaction is valued at approximately $7.4 billion. This news means the technology landscape is about to radically change and quite possibly, Sun hardware is now dead.

The software aspects of the deal actually makes a lot of sense. It certainly seems like a very obvious fit, Oracle is buying Java. Whether Larry Ellison admits it or not, Java is the key to enterprise focused cloud computing. It's the perfect language and format for the fluid movement between existing enterprise data center's and Sun's enterprise focused cloud offering. Both Oracle and Sun have a strong foot hold in the enterprise market, so this merger makes all the more sense purely from a sales point of view. Something Sun hasn't done very well at lately.

Other then making tons of money, what Oracle does best is manage a team of million dollar Ferrari driving sales guys in direct contrast to Sun which is best at managing teams of highly innovative technologists. Together these two companies have a unique opportunity to drastically change how technology is sold using a hybrid sales model made up of internal and external software components connected to a Java centric cloud.

It would also seem that Sun's hardware assets have little or nothing to do with the deal. Oracle is a masterful software marketing company, and over the last 10 years Sun has also transitioned to be a software company. From Solaris, to Java, MySQL to the forth coming Open Cloud Platform. Sun's greatest strengths are in its ability to bridge innovative technology concepts into actual cutting edge software products and services. Oracle's value lies in it's ability to successfully acquire software companies and eek out even higher profit margins then these companies could ever hope to on their own. I also think the deal means the end of the SPARC processor, and potentially the end of Sun Hardware. Maybe not immediately, but it certainly seems like a lower margin business for the traditionally high margin Oracle.

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