Oracle Deal Holding Up Sales Of New Sun Servers - Avnet
September 10 2009 - 11:16AM
Dow Jones News
Uncertainty surrounding Oracle Corp.'s (ORCL) acquisition of Sun
Microsystems Inc. (JAVA) is pushing companies to delay replacing
aging servers made by Sun, electronics distributor Avnet Inc. (AVT)
said Thursday.
Avnet Chief Executive Roy Vallee, speaking at an investor
conference in New York, said that the executives that manage
corporate data centers have been delaying replacing older devices
overall, but the trend has been more pronounced with Sun Micro
servers, as few are sure of Oracle's plans with Sun's hardware
unit.
Avnet distributes servers and other technology products to a
wide range of customers, offering insight into the IT purchasing
patterns of corporations.
Chief information officers, the executives charged with
maintaining a company's IT infrastructure, normally won't make
server purchases without maintenance contracts that can run over
several years.
Oracle Chief Executive Larry Ellison has said that he plans to
keep operating Sun's hardware business after the merger is
completed, but the deal's closing is being held up due to antitrust
concerns raised by the European Commission, and Oracle hasn't yet
offered a detailed plan for Sun's products.
Meanwhile, International Business Machines Corp. (IBM),
Hewlett-Packard Co. (HPQ) and Dell Inc. (DELL) have all launched
efforts to poach Sun customers.
Recent data from research firm IDC shows Sun's revenue from
server sales fell 37% in the second quarter from the year-earlier
period. The overall industry dropped 30%. Sun's server market share
dropped as well, while Dell and IBM saw increases in share.
Oracle shares were recently up 4 cents to $22.56. Sun shares
fell 1 cent to $9.16.
Sun wasn't immediately available for comment.
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155;
jerry.dicolo@dowjones.com