Now a days organizations form an integral part of the society. Imagine a world where we had to get up every day go out and find a job every day , that would be the situation if we have no organizations in the society. To define, “Organizations are a group of people working together to achieve a measurable task(which must be useful to society)”.
Imagine all the organizations in the market as a set of bubbles in water and some times these bubbles get closer and combine into a bigger bubble(called the merging) and some times a bigger bubble might disintegrate into a set of smaller bubbles(called the demerging). History shows that mergers and demergers were very common, in fact they have been far too common and there also have been some major demergers in companies like IBM, AT&T with the US government intervention. IBM and AT&T are the major computer and telecom giants until the 80s and they owned almost 70% of the market share. They almost had the monopoly over the market. So it was then important for the US Government to intervene and disintegrate them into smaller companies. One interesting case I would like to discuss here is of the Xerox company…This company used to have a unique strategy of patents. It used to patent every single part of its machine and for every small improvement it does it used to get the patents. This did not allow other smaller companies to develop as the similar technology which is crucial to develop a Xerox machine was getting patented. Even in such cases the US Government had to intervene and disable all the patents on the Xerox machines.
Now when two companies are merging together, there is going to be a decrease in the competition in the market and one company is able to get the customer base that is being owned by the other. This can cause the company which acquired the other company to increase the price of a product that is having high demand in the market and set a trend of monopoly in the market. It is definitely a customer inconvenience. So it is important that there is a set of body that governs this process in the market keeping in mind the ultimate good of the society.
According to the modern macro economic theory there should be no major monopoly on any product in the market. Why would you allow some one to take over the market on an important product and jeopardize the customer convenience? This is where the need for external governmental bodies like US Department of Justice and others come into picture. They study in detail the effect of the proposed merger or demerger and give a GO or NO GO about it. Now here I want to discuss one of the major mergers that have happened recently.
The Oracle Corporation has acquired the Sun Micro Systems. Oracle has been acquiring many small companies and over a period of time now its list has reached some 53 companies. The strategy of oracle seems to be monopolistic but as i see, it is more apt in the current market situation taking into consideration the complexity of client requirements and the equally complex array of technical solutions available for them.But with the increasing contribution of open source software we might come across a day where there is a free ERP solution just lurking around in the internet. I suppose Oracle must come up with a different strategy all together to face that situation!!
Sun Microsystems has been a major player in IT sector renown for its innovation. Oracle is another big head which has occupied a major market share after the database management systems have become crucial in managing the organizations’ data. Sun Micro Systems was in deep trouble by the time it realized that the management was not efficient in trying to find out ways of producing new revenue. Its major drawback was its support for open source limiting its revenue inflow drastically. Also the management was unable to identify the outsourcing leeches like CSC trying to suck the marginal profit by maintaining the IT of Sun Micro systems.
Sun Microsystems has been very successful in the countries comprising the European Union because of the MySQL 
DBMS. Though it is a open source, it was occupying a major market share. This was major cause of concern because there would be monopoly in the market as MySQL will now be owned by Oracle. There has been a lot of speculation that European union would reject this merger keeping in view the interests of IT giants operating in Europe. But Some how it has approved and gave a good to go.
To conclude Oracle would go ahead and acquire more and more companies in its path but this acquisition of Sun is going to be a great collaboration as Sun once ruled the IT sector with its innovation and Oracle has always been a great manager. This unique combination of talent and management is definitely going to give a nitrous boost in the race of corporate world to Oracle.
