According to Oracle (ORCL) CEO Larry Ellison, Sun (JAVA) is already losing $100 million a month as it waits for regulatory approval, and judging from the price of the company’s stock today, it may be losing even more than that. Shares in Sun slid to $8.11–about 15 percent below Oracle’s offer price and a far cry from the $9.18 they hit in mid-October.

Clearly, investors are alarmed by this latest turn of events, though industry observers say there’s little reason for them to be. Morgan Stanley, for example, believes Oracle’s acquisition of Sun will win EU approval with few, if any, modifications to the MySQL database software about which regulators are so concerned.

“Based on our diligence, we believe the EC is likely to approve the deal with no remedies or remedies pertaining to MySQL’s licensing,” the research house said in a note to clients today. “It is highly unlikely that Oracle restructures the deal (e.g. spins MySQL) or walks away.”

Morgan Stanley’s call: The deal will go through and at $9.50 per share. As the firm notes, the EU hasn’t blocked a U.S.-based transaction since GE/Honeywell in 2001.

According to a 10-Q filing with the Securities and Exchange Commission, Sun (JAVA) lost $120 million, or 16 cents a share, on revenue of $2.24 billion in its first quarter. During the same period a year ago, Sun lost $1.68 billion, or $2.24 a share, on $2.99 billion in sales. Analysts had been expecting earnings of 25 cents a share on revenue of $2.31 billion.

Oracle (ORCL) CEO Larry Ellison recently said that Sun is losing about $100 million a month as it waits for European antitrust regulators to approve its acquisition by Oracle. Looks like he’s about right.

Below, excerpts from the 10-Q:

Server Products Revenue
The decrease in Server Products revenue during the first quarter of fiscal 2010, as compared to the corresponding period in fiscal 2009, was primarily due to the economic downturn and consolidation of our customer base, specifically in the financial services sector, as projects were scaled back, delayed or canceled, in addition to the uncertainty associated with the proposed acquisition by Oracle and increased competition.

Storage Products Revenue
The decrease in Storage Products revenue during the first quarter of fiscal 2010, as compared to the corresponding period in fiscal 2009, was primarily attributable to the economic downturn as projects were scaled back, delayed or canceled, in addition to the uncertainty associated with our proposed acquisition by Oracle and increased competition.

North America
The decrease in revenue during the first quarter of fiscal 2010, as compared to the corresponding period in fiscal 2009, was primarily due to decreased sales of our enterprise Server Products, storage disk products and Services. We are still seeing the results of IT budget cuts instituted last year by our largest customers due to the economic downturn, especially in the financial services sector, in addition to the consolidation of our customer base. Across all sectors, non-critical projects are on hold. Revenue was also negatively impacted by the uncertainty associated with our proposed acquisition by Oracle and increased competition.

PREVIOUSLY:

• European Union Mulling Objection to Oracle-Sun Deal
• Q: What’s the Difference Between Neelie Kroes and Larry Ellison?
• Sun to Sack 3,000
• Former MySQL Boss to EC: Approve Oracle-Sun Deal
• Ellison: Oracle Is the New IBM
• Mr. Ellison Asks That His Burgers Be Served With Freedom Fries Until Further Notice

The Financial Times reports that Oracle’s refusal to offer any concessions to European antitrust regulators may lead them to issue a formal statement of objections to the deal. A complaint could come “within days,” sources tell the FT, though they note that it’s possible that one side or the other will back down before a formal complaint is filed.

If an objection is issued, it will inevitably prolong the entire review process, something Oracle and Sun can ill afford. As Ellison himself recently noted, Sun is losing $100 million a month waiting for approval of the deal.

PREVIOUSLY:

• Q: What’s the Difference Between Neelie Kroes and Larry Ellison?
• Sun to Sack 3,000
• Former MySQL Boss to EC: Approve Oracle-Sun Deal
• Ellison: Oracle Is the New IBM
• Mr. Ellison Asks That His Burgers Be Served With Freedom Fries Until Further Notice

A: Kroes isn’t losing $100 million a month on Sun Microsystems.

Much as Ellison would like to blame the European Commission for yesterday’s bloodletting at Sun, responsibility lies squarely with Oracle (ORCL). For while Ellison complains that every month the $7.4 billion acquisition is delayed amounts to a $100 million loss for Sun (JAVA), he has not yet given the EC good reason to approve it–at least according Competition Commissioner Neelie Kroes, who’s disappointed with Oracle’s cooperation in the commission’s antitrust probe so far.

Kroes said as much in a recent meeting with Oracle president Safra Catz, according to Jonathan Todd, the commission’s spokesman for competition.

“Kroes expressed her disappointment that Oracle failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition concerns identified by the commission,” Todd told Bloomberg. “Kroes reiterated to Catz the commission’s willingness to move quickly towards a decision but underlined that a rapid solution lies in Oracle’s hands. Either they have to give us the information to prove that our competition concerns are not well founded or offer remedies to satisfy our concerns.”

So if Oracle is looking for a quick solution to the case, it best provide one–otherwise, it’s looking at $100 million a month in losses at Sun.

“I understand the European Union has a job to do, but the longer this takes, the more money Sun is going to lose and that’s not good. We want to get it done to save as many jobs as we can.”

– Oracle CEO Larry Ellison

The end of Sun Microsystems as an independent company after 27 years is to be prefaced with a bloodletting. And a big one too. The company is sacking some 3,000 employees as it awaits the closing of Oracle’s (ORCL) planned $7.4 billion takeover.

That’s about 10 percent of its workforce.

The cuts, which were disclosed in a regulatory filing today, are to occur in all markets in which Sun (JAVA) has a presence and will be completed over the next 12 months. Sun expects to incur cash severance and other charges of $75 million to $125 million over the next several quarters as a result.

Seems Oracle CEO Larry Ellison wasn’t kidding when he said further delays in approving his company’s deal to buy Sun would cost more people their jobs.

Ugly news for Sun, which has already made sweeping job cuts over the past year, releasing some 6,000 employees into the wild since last November.

Oracle and Sun have not yet responded to requests for comment.

UPDATE: Oracle has declined to comment on the layoffs at Sun.

“Every new day of uncertainty is potentially very harmful to the various businesses of Sun, reducing competition in the market,” Mickos wrote. “A delay in the closing of this transaction is therefore only going to work against the respectable goal that you set out to achieve when launching the probe into this acquisition.”

Oracle, says Mickos, has far better reason to ramp-up Sun’s MySQL business than it does to harm it.

“Even if Oracle, for whatever reason, would have malicious or ignorant intent regarding MySQL (not that I think so), the positive and massive influence MySQL has on the DBMS market cannot be controlled by a single entity–not even by the owner of the MySQL assets. The users of MySQL exert a more powerful influence in the market than the owner does,” he continues. “Many expected Oracle to harm MySQL as far back as 2005, when they acquired the InnoDB storage engine that plays a crucial role for many MySQL customers. And yet Oracle increased their investment in InnoDB since that time, making MySQL a stronger player in the market.”

An interesting argument and one that appears to offer Mickos little personal gain. Now an entrepreneur in residence at Benchmark Capital, Mickos says he has no financial interest in the transaction. So why bother making it? “I couldn’t live with the fact that I’m not taking action,” Mickos told News.com.

Mickos’s letter will no doubt be welcomed by Oracle, which has repeatedly said it has only the best intentions for MySQL. “No, we’re not going to spin [MySQL] off,” Oracle CEO Larry Ellison told attendees of a Churchill Club event in Silicon Valley earlier this year. “We are keeping everything. We’re keeping tape. We’re keeping storage. We’re keeping x86 and SPARC. And we’re going to increase investment in all of them.”

Earlier this week, people familiar with the matter claimed that Brocade (BRCD) is seeking a buyer and that both Hewlett-Packard (HPQ) and Oracle (ORCL) are among its potential suitors. They said no deal is imminent, but rumor that one might be coming drove Brocade’s shares up some 15 percent.

PREVIOUSLY:

HP, Oracle in Alleged Brocade Bromance

People familiar with the matter tell The Wall Street Journal and Bloomberg that Brocade (BRCD) is seeking a buyer and that both Hewlett-Packard (HPQ) and Oracle (ORCL) are among its potential suitors. No deal is imminent, but rumor that one might be coming was enough to spike Brocade’s shares some 15 percent.

It’s easy to see why Oracle and HP–and IBM (IBM) as well–might be interested in Brocade. The company’s portfolio of data-networking products and services would do much to help HP take on Cisco (CSCO). It would also give Oracle its own line of networking gear, fulfilling CEO Larry Ellison’s dream of offering customers complete systems as T.J. Watson’s IBM once did.

That said, there are issues with both scenarios. As Oppenheimer & Co. analyst Ittai Kidron explained in a research note this morning, an acquisition by Oracle would require the company to really commit to hardware as a long-term growth plan. “If the company truly plans to become a systems company (one-stop shop software/hardware), then Brocade would be a nice fit, especially including Sun Microsystems with no overlap,” Kidron said, adding, “we’re a bit in the dark on strategy here.”

And what of HP? That’s potentially far more problematic, what with equipment overlap and revenue implications. “Brocade would add the missing data center switch architecture as well as a strong presence in the SAN switch market,” Kidron explained. “That said, there would be massive overlap with HP’s ProCurve networking unit, which we believe would be disruptive. Also, IBM and EMC are 10% customers for Brocade and could be lost as customers (along with HP’s 10% business of Brocade).”

So will Brocade be tech’s next big buyout?

“The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do,” Ellison said. “I can’t think of anything that isn’t cloud computing with all of these announcements….These people who are writing this crap are out there. They are insane. I mean it is the stupidest. Is it ‘Oh, I am going to access data on a server on the Internet.’ That is cloud computing?…Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?”

In conversation with former Sun (JAVA) CEO Ed Zander at a Churchill Club event a little over a year later, Ellison expanded on those remarks, suggesting that if the cloud is anything, it’s a cloud of BS.

Cloud’s water vapor….Cloud computing is not only the future of computing, it is the present and the entire past of computing.

…Salesforce.com has been around for a decade. And so has NetSuite…and people are saying, “Well, that’s cloud computing.” Google is cloud computing. Everyone is cloud computing….Everything is in the cloud now….It’s this nonsense.

…But it’s not water vapor. All it is is a computer attached to a network. What are you talking about? I mean, what do you think Google runs on?…Water vapor? It’s databases and operating systems and memory and microprocessors and the Internet!

…And the VCs, I love the VCs. [They ask their start-ups] “Oh…is that cloud?” [And the start-ups go] “Oh! Oh! Microsoft Word! Change ‘Internet’ to ‘cloud’! Mass change. Give it back to these nitwits on Sand Hill Road.”

…What do you mean by “cloud computing”?…All the cloud is is computers on a network.

Our industry is so bizarre. They just change a term and they think they’ve invented technology….You can’t just come up with a [slogan] like “Let’s call that ‘cloud.” [But] it sure beats innovation.”

Below, the full video. Ellison’s rant begins around the 45:54 mark.

“No, we’re not going to spin [MySQL] off,” Oracle CEO Larry Ellison told attendees of a Churchill Club event in Silicon Valley Monday evening. “We are keeping everything. We’re keeping tape. We’re keeping storage. We’re keeping x86 and SPARC. And we’re going to increase investment in all of them.”

In other words, technologists worried about Oracle’s (ORCL) intentions for MySQL and other Sun (JAVA) systems need to relax.

“Sun has fantastic technology. We think it’s got great microprocessor technology–it needs a little more investment, but we think it can be extremely competitive. It’s got the leading tape archival systems. We think the Open Storage on their new disk system is absolutely fantastic. Java speaks for itself. Solaris is overwhelmingly the best open-systems operating system on the planet….Sun has been a national treasure for the last couple of decades.”

“If, just for one dollar, if we could buy IBM, HP, Sun or some other tech company, I’m not sure we wouldn’t pick Sun.”

– Oracle CEO Larry Ellison

The European Commission’s inquiry into Oracle’s proposed acquisition of Sun is costing the database giant dearly. Speaking at a Churchill Club event in Silicon Valley Monday evening, Oracle CEO Larry Ellison said Sun is losing $100 million a month because of the extended European antitrust review.

The uncertainty around the deal has sent some shaken Sun (JAVA) customers running to rivals like IBM (IBM) and Hewlett-Packard (HPQ). “The longer this takes, the more money Sun is going to lose, and that’s not good for anybody,” Ellison said. “We want to get this done to save as many jobs as we can.”

That said, Ellison is confident the deal will be approved. “The U.S. took their time and deliberations and cleared it. They said it was overwhelmingly a pro-competitive deal,” he said. “The Europeans have to do their job too, but I think they’ll come to the same conclusion.”

And once they do, once Oracle (ORCL) begins peddling high-performance computer systems that integrate its technology with Sun’s at the engineering level, the company will be well on its way to becoming the next IBM.

In Ellison’s view, anyway.

“I would like us to be the successor to IBM,” Ellison said. “But we want to be T. J. Watson’s IBM. Not Gerstner’s IBM. Not Palmisano’s IBM,” he said, referring to the company’s other CEOs. “That’s when IBM really was the dominant software company.”

Continuing, Ellison noted that “T.J. Watson’s IBM was the greatest company in the history of enterprise in America because its combination of hardware and software was running most of the enterprises on the planet. We think with the combination of Sun technology and Oracle technology we can succeed and beat IBM. That’s our goal. We have a deep interest in the systems business. We think that by combining our software with hardware that we can deliver systems that can be the backbone of most enterprises in America and around the world.”