Oracle Corp CEO Larry Ellison cheered the closing of his company's $7.4 billion acquisition of Sun Microsystems on Wednesday, vowing that Sun will immediately add to Oracle's profits.
He said layoffs won't be as severe as some industry analysts were predicting. Analysts had expected Sun to suffer huge job cuts once Oracle closed the acquisition. But Ellison said Oracle wants to bulk up Sun's staff to improve its sales -- a problem Sun has had trouble cracking since the dot-com meltdown a decade ago.
Oracle is hiring 2,000 people over the next few months for the Sun businesses, while layoffs from the acquisition will be about half that number, Ellison said.
"We're hiring, not firing. We're not cutting Sun to profitability," Ellison said at a conference with industry analysts at Oracle's headquarters here. "We think Sun's a growing business."
Ellison also confirmed that he's interested in buying the Golden State Warriors basketball team, a prospect that had been rumored.
"I'm trying," he said, in response to a question. "Unfortunately you can't have a hostile takeover of a basketball team." The line that got laughs because Oracle is a highly acquisitive company and won a bruising hostile takeover fight for rival PeopleSoft, a $10.3 billion deal Oracle closed in 2005.
Ellison had previously expressed interest in buying an NBA franchise and could take the Warriors if current top man Chris Cohan eventually decides to sell.
Oracle said Wednesday that it completed the Sun acquisition, one week after the European Union offered its long-awaited approval of the deal. European regulators determined the combined company would not harm competition in the database software markets, where Oracle dominates but a Sun division is a growing rival.
Sun was a dot-com highflyer that advanced the technology used to link computers, making them more useful as a network.
The deal with Oracle was announced last April. The US Department Justice cleared it four months later. With Sun, Oracle gets ownership of the Java programming language, which runs on more than a billion devices, and the Solaris operating system. Oracle also gets sophisticated server technology that it can bundle with its software. Sun is the world's No. 4 server maker.
One reason job losses may be limited is the fact Sun has already cut deeply because of its sagging finances. In October, Sun revealed plans to cut up to 3,000 jobs as the antitrust scrutiny dragged on. Sun has already cut about 7,600 workers in three previous rounds of layoffs.
Sun had 27,596 employees at the end of September. Previous Oracle acquisitions have been followed by deep job cuts.
Oracle fired some 5,000 workers after completing the PeopleSoft deal. Many of the layoffs came from PeopleSoft's 11,000-plus work force. The next year, Oracle cut about 2,000 jobs after absorbing Siebel Systems Inc, a company it bought for $5.85 billion and had 4,700 workers.
Friday, January 29, 2010
IT market, Outsourcing, Recession
No threat to IT Inc from Obama: Gartner
IT analyst firm Gartner dismissed any threat to the over $60-billion Indian IT exports industry following US President Barak Obama's plan to stop giving tax breaks to those US companies shipping jobs abroad.
"There is no need for panic...Even if tax breaks are taken away, the US firms have to outsource because that makes business sense for them," Gartner senior research analyst Diptarup Chakroborty said.
"If the tax breaks are taken away, it is not going to impact the Indian IT industry adversely. With the global economy looking up, a lot of emerging markets are opening up. The contribution from those markets is going to offset the impact of tax breaks if any," he said.
As the overall market would be growing the problems of tax breaks will be overlooked by the firms. The software firms association Nasscom also has sought to downplay Obama's plan to slash tax breaks for companies shipping jobs abroad, saying the real worry is "protectionism" and not tax breaks.
"I think the concerns that we have is about indirect protectionism. I don't think tax break issue is really the one which is important for us. Obama's comment was not related to outsourcing. It's about US companies operating in regions where they get tax benefits," Nasscom VP Ameet Nivsarker said.
"There is no need for panic...Even if tax breaks are taken away, the US firms have to outsource because that makes business sense for them," Gartner senior research analyst Diptarup Chakroborty said.
"If the tax breaks are taken away, it is not going to impact the Indian IT industry adversely. With the global economy looking up, a lot of emerging markets are opening up. The contribution from those markets is going to offset the impact of tax breaks if any," he said.
As the overall market would be growing the problems of tax breaks will be overlooked by the firms. The software firms association Nasscom also has sought to downplay Obama's plan to slash tax breaks for companies shipping jobs abroad, saying the real worry is "protectionism" and not tax breaks.
"I think the concerns that we have is about indirect protectionism. I don't think tax break issue is really the one which is important for us. Obama's comment was not related to outsourcing. It's about US companies operating in regions where they get tax benefits," Nasscom VP Ameet Nivsarker said.
HCL, IT market, New Deals
HCL Tech bags Rs 231 cr Meggitt deal
Software company HCL Technologies today said it has received a contract worth around Rs 231 crore from UK-based defence equipment maker Meggitt for providing engineering services.
Meggitt signs $50 million (around Rs 231 crore) global engineering transformation services agreement with the company's engineering and R&D services (HCL ERS) division, HCL Technologies said in a filing to the Bombay Stock Exchange.
"HCL integrates the right capabilities and business models to ensure organisations such as Meggitt establish a competitive advantage," HCL ERS Senior VP and Global Head of Sales & Practice Sandeep Kishore said.
HCL was selected based on its understanding of Meggitt's business challenges and proven track record of partnering with large aerospace and manufacturing companies on highly complex engineering development programmes.
"This strategic initiative will help us respond to the current economic environment while successfully positioning us for future growth," Meggitt's Chief Executive Terry Twigger said.
Meggitt PLC is an international group operating in North America, Europe and Asia, known for its specialised extreme environment engineering. Meggitt is a leader in civil and military aerospace equipment, sensing systems, combat support and defence systems training.
Meggitt signs $50 million (around Rs 231 crore) global engineering transformation services agreement with the company's engineering and R&D services (HCL ERS) division, HCL Technologies said in a filing to the Bombay Stock Exchange.
"HCL integrates the right capabilities and business models to ensure organisations such as Meggitt establish a competitive advantage," HCL ERS Senior VP and Global Head of Sales & Practice Sandeep Kishore said.
HCL was selected based on its understanding of Meggitt's business challenges and proven track record of partnering with large aerospace and manufacturing companies on highly complex engineering development programmes.
"This strategic initiative will help us respond to the current economic environment while successfully positioning us for future growth," Meggitt's Chief Executive Terry Twigger said.
Meggitt PLC is an international group operating in North America, Europe and Asia, known for its specialised extreme environment engineering. Meggitt is a leader in civil and military aerospace equipment, sensing systems, combat support and defence systems training.
IT market
Microsoft profit up 60% to 6.7bn
Microsoft Corp. said Thursday that earnings in the most recent quarter jumped 60 per cent, helped by a rebound in personal computer sales.
The PC industry bounced back during the 2009 holiday shopping season after one of its roughest years to date. Microsoft's earnings are closely tied to computer sales because its two most profitable divisions make the Windows operating system and Office business software.
Microsoft said its net income for the fiscal second quarter that ended Dec. 31 rose to $6.7 billion, or 74 cents per share, compared with $4.2 billion, or 47 cents per share, in the year-ago period. Revenue increased 14 percent to $19 billion.
The latest version of Windows, called Windows 7, was released during the quarter. Revenue from the Windows business jumped 70 percent.
Shares of Microsoft rose 25 cents, or 0.9 percent, to $29.41 in extended trading after the release of results. Earlier, shares closed down 51 cents, or 1.7 percent, at $29.16.
The PC industry bounced back during the 2009 holiday shopping season after one of its roughest years to date. Microsoft's earnings are closely tied to computer sales because its two most profitable divisions make the Windows operating system and Office business software.
Microsoft said its net income for the fiscal second quarter that ended Dec. 31 rose to $6.7 billion, or 74 cents per share, compared with $4.2 billion, or 47 cents per share, in the year-ago period. Revenue increased 14 percent to $19 billion.
The latest version of Windows, called Windows 7, was released during the quarter. Revenue from the Windows business jumped 70 percent.
Shares of Microsoft rose 25 cents, or 0.9 percent, to $29.41 in extended trading after the release of results. Earlier, shares closed down 51 cents, or 1.7 percent, at $29.16.
IT market, New Deals, Wipro
Wipro in outsourcing deal with BAT
No. 3 Indian software-services firm Wipro Ltd said on Wednesday it signed a multi-year outsourcing deal with British American Tobacco Plc, the world's second-biggest cigarette maker.
Wipro will help British American Tobacco's application support services for global business operations, the company said in a statement. Financial details were not disclosed.
Wipro will help British American Tobacco's application support services for global business operations, the company said in a statement. Financial details were not disclosed.
IT market, Oracle
Oracle closes $7.4 bn Sun deal
Software major Oracle Corp has completed the takeover of hardware company Sun Microsystems Inc for $7.4 billion.
The deal, which was announced nine months ago, would transform the IT industry, Oracle said in a statement yesterday.
The two companies, which have a significant presence in India, together employs more than 26,000 people in the country. Oracle has more than 25,000 employees in India while Sun Microsystem has 1,200 people.
The Sun Solaris operating system is the leading platform for the Oracle database, Oracle's largest business. With the acquisition of Sun, Oracle can optimise Oracle database for some of the unique, high-end features of Solaris.
"With the addition of servers, storage, SPARC processors, the Solaris operating system, Java, and the MySQL database to Oracle's portfolio of database, middleware, and business applications, we plan to engineer and deliver open and integrated systems--from applications to disk--where all the pieces fit and work together out of the box," Oracle said.
The European Union's antitrust watchdog has approved the Sun-Oracle transaction last week saying the deal would not would restrict competition in the database's market. The approval from the EU came after months of investigation.
In April last year, Oracle has agreed to buy Sun Microsystems for $7.4 billion or $9.50 a share in cash.
The deal, which was announced nine months ago, would transform the IT industry, Oracle said in a statement yesterday.
The two companies, which have a significant presence in India, together employs more than 26,000 people in the country. Oracle has more than 25,000 employees in India while Sun Microsystem has 1,200 people.
The Sun Solaris operating system is the leading platform for the Oracle database, Oracle's largest business. With the acquisition of Sun, Oracle can optimise Oracle database for some of the unique, high-end features of Solaris.
"With the addition of servers, storage, SPARC processors, the Solaris operating system, Java, and the MySQL database to Oracle's portfolio of database, middleware, and business applications, we plan to engineer and deliver open and integrated systems--from applications to disk--where all the pieces fit and work together out of the box," Oracle said.
The European Union's antitrust watchdog has approved the Sun-Oracle transaction last week saying the deal would not would restrict competition in the database's market. The approval from the EU came after months of investigation.
In April last year, Oracle has agreed to buy Sun Microsystems for $7.4 billion or $9.50 a share in cash.
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