With Sun Microsystems Inc. on the verge of being absorbed by Oracle Corp., one of its biggest longtime rivals, Hewlett-Packard Co. today announced plans to go after its customers with various migration deals and discounts.
In short, Sun is bleeding and the sharks are gathering around it. Just yesterday, Sun said it expects fourth-quarter revenues to plunge to between $2.58 billion to $2.68 billion, from $3.78 billion during the same period last year. Sun's fourth fiscal period ended June 30, and Oracle is looking to complete its acquisition of the struggling computer maker by the end of August unless it's held up by a U.S. Department of Justice antitrust review.
HP is aiming its migration packages at Sun users that are running the Solaris operating system on UltraSparc machines. HP is the leading supplier of x86-based systems running Solaris and is increasing its investment in that technology -- hence the focus of the migration deals and discounts is on the UltraSparc users, said Paul Gottsegen, vice president of integrated marketing at HP.
Gottsegen added that he believes the majority of Sun hardware users will look to migrate to Linux and that those users may move to Solaris x86 for an interim period.
HP's new Sun Complete Care program offers free migration consulting; special financing terms such as 90-day payment deferral, server trade-in credit and rebates; up to 85% off HP-UX 11i with a Solaris trade-in; up to 30% off training programs; and other incentives.
Larry Ellison, Oracle's CEO, cited Solaris along with Java as a key asset his firm will gain with the acquisition. "The Solaris operating system is by far the best Unix technology available in the market," Ellison said during the announcement in April that the company had agreed to buy Sun.
But Ellison hasn't said much since then about Oracle's plans for Sun's hardware, probably because merger-related legal constraints prevent executives of both companies from detailing postmerger product changes, said Jonathan Eunice, an analyst at Illuminata in Nashua, N.H.
"The biggest issue they are facing right now is uncertainty," Eunice said. "It is impossible for Sun to represent what Oracle will do with any of these assets, and it is also impossible for Oracle to say what they do with these assets."
Steve Hassell, CIO at Sun UltraSparc user Emerson Electric Co., said his firm has no immediate plans to move off that platform. "We feel that where we stand, we are fine," Hassell said. "But you can assume we are having a whole lot of conversations with Oracle.
"Even if [Oracle] decides in the long run to move away from Sparc, it's not going to be something that is going to happen in the very near term," Hassell added.
Although HP said that the incentive package announced today for Sun customers is new, what is not new are competitive attack campaigns in similar circumstances. Vendors typically have some ongoing campaign targeting specific rivals. And IBM has a permanent effort called the Migration Factory aimed at the customers of all its competitors, including HP.