Reflections on a Flickering SPARC

A report last Friday in the San Jose Mercury News that was laying off 450 workers in its hardware division suggests that the proprietary silicon experiment the company began with its 2010 acquisition of Sun Microsoft is nearing the end.

It’s sensible from a financial point of view, especially for a company like Oracle that is demanding when it comes to business unit performance. In its most recent quarter (Q2 FY2017) Oracle reported that sales of hardware products (servers, etc.) were down -13% to $497M for the quarter, and down -16% in the previous six months to $959M. The company has also suffered double digit sales declines during the past five quarters.

Additionally, Oracle’s server business has long been absent from the upper “Top 5” reaches of the server market, and thus relegated to the “Others” category in market sizing studies by IDC and Gartner. You could say that its faltering results suggest that Oracle either didn’t deliver on or wasn’t especially serious about its promises to Sun hardware customers.

Considering the strategy espoused by Oracle executives—focusing mainly on engineered/integrated systems and database appliances—the latter interpretation is closer to being correct. High-end solutions certainly have their place at Oracle, especially in applications where optimizing performance of the company’s core database solutions is concerned.

But with sales of traditional Unix-based systems, including Oracle’s /Solaris servers, under continuous pressure, the company needed and yet failed to do considerably more.

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NOTE: This column was originally published in the .

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