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Sun-Oracle Deal Could Shake Up Tech

Stocks in this article: JAVA ORCL MSFT IBM HPQ

BRUSSELS ( TheStreet) -- Oracle (ORCL) finally gets its hands on Sun, (JAVA) after the European Union approved the controversial $7.4 billion acquisition.

The deal might have significant ramifications across the tech sector, expanding Oracle's reach well beyond its traditional database software business and increasing competition with IBM (IBM) and Hewlett-Packard (HPQ) . Brimming with servers and storage, Sun initially seemed a strange target for Larry Ellison's huge firm, although Oracle had already made a play into the hardware business with its Exadata storage server (which uses Sun's kit).

Sun may have earned a reputation for poor execution in recent years, but it has a broad footprint that encompasses enterprises, service providers, and high-end data centers, all of which provide Oracle with an opportunity to carve out additional revenue.

The greater strategic value for Oracle, though, comes in Sun's Java, Solaris and MySQL software technology. MySQL, which competes with Microsoft's (MSFT) SQL and IBM's DB2, is one of Sun's brightest rays and was the major bone of contention in the Oracle-Sun deal. Regulators initially voiced concern over Oracle's willingness to maintain MySQL's open-source credentials.

With the deal now rubber-stamped by the E.U., Oracle can use MySQL to extend its reach, particularly into the small- to medium-sized business market.

Sun's Solaris software is also a major platform for Oracle's databases and Ellison is expected to optimize his company's software for some of Solaris' high-end features.

Java, on the other hand, could open the door to Sun's vast installed base, as well as its extensive partner ecosystem.

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