Sun customers face difficulties as DoJ delays Oracle buy

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Sun customers face difficulties as DoJ delays Oracle buy

Considers thorny issue of Java licences.

The US Department of Justice (DoJ) has dealt a blow to Sun Microsystems customers by extending its 30-day review of Oracle's proposed US$7.4bn ($9.2bn) acquisition of the company.

The DoJ has stated that it needs more time to explore how the purchase will affect Java rights licensing.

However, Oracle said in a statement on Friday that it is not concerned with the US government's need for more information, declaring that the "narrow issue "about the way rights to Java are licensed "is never going to get in the way of the deal".

Daniel Wall, an attorney at Latham & Watkins, the legal firm representing Oracle, insisted that the acquisition is still on track.

"I fully expect that the investigation will end soon and not delay the closing of the deal this summer," he said.

However, Gartner analyst Philip Dawson suggested that, even though "technicalities" leading to the extension of the review are "not a big hurdle", the delay still has the potential to damage Sun's business.

"The problems are probably contractual, and just down to how Java licences will be transferred after the acquisition. But the difficulty is that clients are left wondering, when closing deals with Sun, what Oracle will do when it's in charge," he said.

"Customers need reassurance on buying hardware and software, and Oracle is the only one that can reassure them. But it can't until the deal closes. For example, Oracle could change the pricing of Java, or open source everything so it holds little value. It could do anything, so anyone with a Java development kit knows that Sun's terms and conditions are likely to change in the next few months."

Oracle announced its intention to acquire Sun on 20 April, topping a bid from IBM.

The database firm has said that it expects the purchase to generate more profit than the previous acquisitions of BEA, PeopleSoft and Siebel combined, and that Sun will contribute over $1.5bn (£1bn) to its non-GAAP operating profit in the first year, and more than $2bn (£1.4bn) in its second year.

Oracle uses Sun's Java software to build its Fusion Middleware, and has said that it is the most important software Oracle has attempted to acquire.

Sun shareholders are set to vote on the deal on 16 July.

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