Re: RDB Sold to Oracle! Damn!

engelincg_at_decus.se (Claes Engelin) writes:

>In article <Cv3sMw.6KA_at_utnetw.utoledo.edu>, rdilwor_at_uoft02.utoledo.edu writes:
>>[...]
>>
>> I suppose everyone has either heard or read about it by now, but for
>> those who haven't: An article in the Technology and Health section of
>> today's Wall Street Journal (8/25/94) sez:
>>
>> "Digital Equipment Corp., reached a preliminary agreement to sell its
>> database software unit to Oracle Corp. for about $100 million, people
>> familiar with the discussions said."
>> [...]
 

>Please say it isn't so! Anybody at DEC care to comment? (Lilian and Larry, are
>you listening?)
 

>If it is true, my only comment is that selling Rdb to Oracle is an
>incomprehensibly dumb thing to do!

You are now the third person who has posted a note basically saying that this is a stupid transaction. What is your basis for this assertion ?

The deal should be good for Oracle because it will gain market share, and lower its average cost of sales. (IE with the same sales and marketing infrastructure they will be selling X more licenses. This means more money for development to fend off Sybase, and higher profits for Oracle's investors. Isn't that what companies are supposed to do ? They will also get some good software technology and have access to some good engineers.

For Digital, it means that they can eliminate rdb development, support, and marketing. They get a nice chunk of cash or stock for doing so. They can invest this cash in projects that provide higher returns for them than rdb did - building computers for example. If providing rdb was losing money for DEC, or if it was not making as much money for them as spending the same dollars elsewhere, it was a very smart move to sell it off.

Just because you're used to getting a relational database for free, or subsidized by a sick company, and this won't be happening anymore doesn't make this is a stupid deal.

The whole idea is that it will make both Digital and Oracle stronger. It would only be a stupid deal if Digital and Oracle did not agree on the correct price. The market seems to think that it is a good deal - The stock of both companies rose on the WSJ announcement.

Comments Welcome,  

-- 

- Dan

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