"Sun is the first failing business that Oracle has acquired, and it is making a loss large enough to hurt Oracle bottom line. Oracle will have to tell the market - and customers - how it is going to turn that around," Miles told Computerworld UK.
But the UK OUG “welcomes” the news of Oracle’s $7.4 billion (£5.1 billion) purchase.
Miles believes Oracle snapped up Sun to keep its Java software out of the hands of its competitors. The Oracle-Sun deal came just weeks after IBM was rumoured to be on the verge of buying Sun.
“Oracle had to buy Sun as it really could not afford someone else to own Java,” said Miles.
Miles is confident that Oracle will take a creative approach to maximising the value of the deal.
“There are plenty of options ranging from simply managing current customers into a safe harbour, like HP capitalising on the Exadata relationship, through to selling off, through to revitalising," said Miles. One "even more outlandish" option is to use the manufacturing capability to build a huge cloud capability.
Bart Narter, senior VP at financial research firm Celent, agreed that Oracle needed to make the purchase to fight off competitors.