{"id":556,"date":"2009-04-21T08:09:13","date_gmt":"2009-04-21T16:09:13","guid":{"rendered":"http:\/\/www.nomadicminds.org\/blogs\/?p=556"},"modified":"2009-04-21T08:09:13","modified_gmt":"2009-04-21T16:09:13","slug":"catz-on-sun","status":"publish","type":"post","link":"http:\/\/www.nomadicminds.org\/blogs\/2009\/04\/catz-on-sun\/","title":{"rendered":"Catz on Sun"},"content":{"rendered":"

\nSafra Catz, Oracle’s President and right-hand person for Larry Ellison, commented on the Sun acquisition, with a slight on Sun’s current management. From New York Times<\/a>.
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Sun is a modern technology company that outsources nearly all the manufacturing, assembly and servicing of its hardware.<\/p>\n

We will be able to run Sun at substantially higher margins. first year.<\/p>\n

Under Oracle the Sun businesses would be able to achieve operating efficiencies far in excess of what Sun has done to date.\n<\/p><\/div>\n

Ms. Catz estimated that Sun’s operations would generate an additional $1.5 billion a year in operating profit, and add 15 cents a share to Oracles profit.<\/p>\n

Sun, for the latest quarter (ending December, 2008), had 1.8 billions in gross margin and 21 millions in operating profit (if we exclude “non-recurring expenses”). What Ms. Catz said translated to 375 millions a quarter in operating profit. That’s 354 more than Sun’s current performance. What could she do?<\/p>\n

Oracle is not experienced in selling servers and that industry is fiercely competitive. I do not believe Sun’s server sales will increase drastically. Sun probably can contribute to Oracle’s software and service sales, but I would be conservative and keep the revenue part of the equation flat. Ms. Catz will, then, basically cut 354 millions, per quarter, from Sun’s operating expenses: part from its 411 millions R&D and other part from its 916 millions SG&A (selling, general, and administration). Note that Sun’s R&D spend (13%), although high for server companies, is quite similar to Oracle’s (12%) and Microsoft’s (13%).<\/p>\n

If you were Ms. Catz, where would you find that $354 millions?<\/p>\n","protected":false},"excerpt":{"rendered":"

Safra Catz, Oracle’s President and right-hand person for Larry Ellison, commented on the Sun acquisition, with a slight on Sun’s current management. From New York Times. Sun is a modern technology company that outsources nearly all the manufacturing, assembly and … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[210,211,124],"_links":{"self":[{"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/posts\/556"}],"collection":[{"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/comments?post=556"}],"version-history":[{"count":2,"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/posts\/556\/revisions"}],"predecessor-version":[{"id":558,"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/posts\/556\/revisions\/558"}],"wp:attachment":[{"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/media?parent=556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/categories?post=556"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.nomadicminds.org\/blogs\/wp-json\/wp\/v2\/tags?post=556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}