Oracle-Sun: Schwartz shows up pundits, IBM ends up the loser

21.04.2009

Sun CEO Jonathan Schwartz, owner of perhaps the last CEO ponytail in Silicon Valley, has shown up the all-knowing pundits who dubbed him "." Less than two weeks after reportedly refusing an , Schwartz and his board have closed a deal with Oracle, one of the few companies doing well in the current recession. Schwartz, if reports are correct, will go home with an extra three years' pay.

More importantly, Oracle will soon own Java and Solaris, two of the most widespread technologies used by businesses for both external and internal network services.

Sun will get US$7.4 billion, or $9.50 per share, in cash. The company currently has $2.6 billion in cash and $700 million in long-term debt, according to a Wall Street Journal .

Schwartz and his mentor, former Sun CEO Scott McNealy, will take home buyout packages equivalent to three times their annual salaries plus bonuses, according to . Talks with IBM were said to have collapsed because IBM balked not only at the per-share price Sun wanted, but also at the golden parachutes for execs.

Yet in the long run, the extra cost would probably have been worth it to IBM, rather than letting Java and Solaris go to Oracle, a tough competitor -- or in some cases, a tough partner -- with a huge entrenched customer base. IBM is the loser here, while Schwartz and McNealy will walk away as the surprise winners.