Re: RDB Sold to Oracle! Damn!

In article <ddrukerCv94x6.q8_at_netcom.com>, <ddruker_at_netcom.com> 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.
>

Maintaining both products will increase Oracle's development costs (assuming they don't kill one of them). Their market share will not increase by that much since Rdb has a fairly small share (of total database market, not just VMS).

> 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.
>

Rdb, because of its impressive performance and low price, probably has helped DEC sell some of that great hardware. If Oracle kills the product (or releases it on other platforms) DEC will not see that advantage (and won't see any of the Rdb profits either). In addition, DEC sells several products that depend on Rdb to run (CDD, DTR (because of CDD), HSM (and other storage products), etc.), they will now be dependant on another software company for that. If customers must buy Rdb from Oracle to run these products, they will become less attractive.

> 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.
>
 Wall Street has never been known for its long term vision. Of course it will drive the price of DEC stock up, they will have $100 million in their pocket. That doesn't mean Wall Street will still think its a good idea 2 years from now.

[This is basically a repost of a reply I posted yesterday, but due to problems on our non-DEC systems ( :-) it didnt make it. If the other turns up, sorry for the duplication] Received on Wed Aug 31 1994 - 03:32:49 CEST