Indeed, the bulk of whatever value still exists within Sun is on the software side. Oracle gains control of Java, securing the core of its Fusion middleware, but at EMA, where we specialize in IT management, we see the management and infrastructure solutions as the jewel in this deal.
To start with, the deal combines two of the leaders in identity management. While the future of the combined portfolio is not yet clear, it clearly threatens IBM as well as CA directly in this space. Sun's position had weakened with the departure of key figures such as much of the executive team of the former Waveset, but the IP acquired with the deal will more than enhance Oracle's already strong position in identity.
Of course, Sun was not exactly beating the market in IT management, so even the combined solutions of Sun and Oracle will not rival larger vendors like IBM/Tivoli or HP (or non-hardware management vendors like BMC Software), in breadth of functionality and platform support especially. For Sun and Oracle enterprise customers, this makes Oracle very attractive as a primary management vendor, because it has exceptional depth and expertise in those specific areas.
Oracle also picks up some strong virtualization and virtual systems management (VSM) capabilities too. EMA shows Oracle VM a distant 10th place in virtualization penetration, and Oracle has limited VSM capabilities. Coupled with its recent purchase of Virtual Iron, Oracle may just have a chance in the iron-to-app market, as it can deliver the complete stack of server virtualization, OS, storage, database, middleware, applications, virtual desktops, security, physical systems management, and virtual systems management. The major missing link is networking. (Maybe an indicator of future acquisition opportunities?)
However, there are still significant concerns for Oracle. Oracle is likely to cater primarily to a homogeneous market (Sun/Oracle customers are by far its sweet spot), so it will be challenged to support the heterogeneity found in the vast majority of data centers. Add-ons will still be required so both "all-in-one" vendors and niche players will still be very competitive.