VMware, Oracle-Sun Dominate the Headlines

It will take a long time before we really can take stock of the respective successes of this week’s two huge events — VMware releasing its vSphere cloud operating system, and Oracle buying Sun Microsystems — but that didn’t stop copious amounts of speculation. And why should it have? While both announcements promise to have profound effects, they also leave plenty of unanswered questions.

For VMware, the release of vSphere 4 marks the realization of Step 1 of the cloud vision it began touting in September at VMworld. The idea of turning a data center into a cloud is nothing new, but VMware does add some new wrinkles (not to mention an existing customer base of more than 130,000). Among the most interesting features of vSphere 4 is that is serves as a “bridge builder” between VMware data centers and VMware-based public clouds. However, this VM-centric approach seems to go against notions of cloud openness and interoperability, as well as the increasing trend toward running multi-hypervisor data centers. In an ever-advancing virtualization market, $3,500 per processor is a lot to pay to lock yourself into VMware.

Issues of vendor lock-in aren’t the only concerns about vSphere, though. One big question is whether VMware will be able to break down enterprises’ traditional siloed purchasing practices, a necessary end if VMware hopes to sell its interconnected cloud vision. And despite the clamor over vSphere, financial analysts are skeptical about VMware stock. I won’t pretend to know the first thing about investing, but VMware’s undisputed lead in the growing virtualization market, as well as its immense ecosystem of VAR, OEM and ISV partners, have to bode well for the future (once companies get their budgets back under control).

Oracle’s acquisition of Sun raises so many questions it’s difficult to know where to begin, although the database might be a fine jumping-off point. Over at GigaOM, Om Malik makes a compelling argument that this move might be as much about eliminating competition from MySQL as it is about gaining new technologies.  It’s a fair point, and one that has some precedence: two years ago around this time, Oracle bought in-memory data grid leader Tangosol, ensuring Oracle revenue grew right along with adoption of this anti-relational-database technology.

Sun’s hardware business is a trickier situation, as Oracle certainly doesn’t have expertise (or experience, at least) selling and designing servers. There has been speculation that Oracle will shop for a buyer, with one particularly intriguing prediction being that new Oracle partner HP will purchase Sun’s hardware IP.  The Oracle-Sun news even sparked some fantasy acquisition talk, like InformationWeek’s Mike Fratto suggesting Cisco should buy EMC to bring an in-house storage presence to its Unified Computing strategy. (That would make Cisco the majority shareholder in VMware, too, with which it already has an airtight relationship.)

Addressing cloud computing specifically, Sun Cloud CTO Lew Tucker said the company is moving ahead with its planned rollout of the Sun Cloud this summer, pending word to the contrary from Oracle. It’s tough to disagree with that stance. After putting so much time and effort into building its cloud effort, there is no use stopping now — and a more mature offering leaves less room for Oracle to impose its will or drastically alter what could be a very competitive suite of cloud offerings. (Would you want this man shaping your nascent cloud offering?)

Amid the ocean of predictions, the only real consensus — unfortunately — seems to be that Oracle will have to axe thousands of jobs in order to ensure profitability. This is terrible news for workers, but potentially great news for tech companies in need of talent.

Question of the week

How will Oracle carry on Sun’s cloud computing initiative?
Relevant analyst in operating systems
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