One of the leading software companies in the world - Oracle Corporation surprised the entire tech world on Monday by declaring that it will acquire the Silicon Valley technology company, Sun Microsystems. The Redwood City, California based Oracle announced that it will purchase Santa Clara, California based Sun Microsystems, Inc. for $7.4 billion in cash.

Sun Microsystems is a multinational vendor of computers, computer components, computer software, and information technology services. It is best known for its Java language, which is one of the computer industry's best known brands for over the past 13 years.

Speaking at the conference call with analysts, Oracle CEO Larry Ellison said, "Java is the single most important software asset we have ever acquired." It was definitely big and daring announcement from a chief executive. "Java runs on hundreds of millions of computers, cell phones and even DVDs, and Oracle's fusion middleware is based entirely on Sun Java," Ellison added.

After the acquisition, Java will become one of the strongest revenue sources for Oracle. The deal will turn Oracle from mere maker of databases and other software to a gigantic hardware company, which will compete with Hewlett-Packard, IBM and Cisco in the multibillion-dollar market for data centers. Presently, Oracle is ranked third on the list of largest software companies in the world, after Microsoft and IBM. Secondly, with the deal, the Oracle will permanently close the chapter of Sun - IBM acquisition talks; Oracle will snatch away Sun from the Big Blue, which was reportedly in talks to acquire Sun.

According to analysts, the acquisition of Sun Microsystems by Oracle will create a $1.5-billion (Rs 7,474 crore) entity in India. The deal will help Oracle to compete more aggressively with its chief rival IBM by tying its business software with Sun's computer servers, and marketing them at competitive rates to customers in India. The acquisition will help Oracle expand its share in India's $34 billion market (Forrester estimate) for IT products and services.

For the Indian clients, such Punjab National Bank (PNB) that uses Sun Microsystems' computer servers and runs several applications through database software of Oracle, the acquisition will really be beneficial. RIS Sidhu, chief information officer (CIO) of PNB, said, "Since we have both Oracle and Sun as important vendors, this acquisition will bring a lot of value."

The acquisition deal will help boosting Oracle revenues in India. According to India's oldest IT publication, Dataquest, Sun Microsystems India's total revenues were Rs 1, 674 crore, while Oracle India's revenues were around Rs 5,800 crore in the year 2008.