Fortune is airing a rumor that Oracle may be planning to sell Sun's hardware business to HP:
Why would [CEO Larry] Ellison want to give up Sun's hardware? Actually, he never wanted it in the first place. Oracle's first offer to Sun was for just the software business, regulatory filings show. Oracle is a software company after all, and while it certainly has the wherewithal to transform itself into something else, it might not be worth the hassle â€" or the ding to its profit margins.An interesting observation. And if it was going to sell off the hardware business, going to HP would make sense as the two already are partnering on a database optimized server. Many of the advantages to the deal were on the software end, and even removing any advantages from having the hardware lines wouldn't disturb them. It would also solve the big potential problem of channel and partner conflict that Oracle faces with the likes of IBM, HP, and Dell.
Such a deal would also give HP a high end line of hardware that could more easily compete with the big iron offerings of major rival IBM. However, finding themselves handed over to HP would certainly not make Sun's VARs, dealers, and partners happy, as they might well find themselves often pushed aside for the existing product lines.
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