Many big tech hardware makers are expanding into services. Hewlett-Packard (HPQ) last year bought Electronic Data Systems; Dell (DELL) agreed last month to buy Perot Systems; and Xerox (XRX) cut a deal for Affiliated Computer Services (ACS), also last month.

Software giant Oracle (ORCL), however, is expanding into hardware, and has no interest in buying a services company, said Chief Executive Larry Ellison at an event for financial analysts on Thursday.

“We are really brilliant or we’re idiots,” Ellison said of his company’s $7.4 billion acquisition of Sun Microsystems (JAVA), a deal that is currently being held up by European antitrust regulators.

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In order to win European Union regulatory approval for the pending acquisition of Sun Microsystems (JAVA), Oracle (ORCL) may need to spin-off or sell Sun’s MySQL open-source database business, according to analyst Trip Chowdhry, of Global Equities Research.

Chowdhry says the “MySQL community” is concerned about Oracle owning MySQL, asserting that users don’t believe Oracle has good intentions. What matters more, of course, is what the European regulators think, since they are the last obstacle to completion of the merger. And he thinks they will see Oracle owning MySQL as reducing competition in the corporate database market.

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The Oracle (ORCL) acquisition machine struck again Thursday, as the software giant snapped up GoldenGate Software, a closely held company whose products help businesses tie together data stored in different systems.

Oracle didn’t disclose terms of the deal. But this isn’t one of the mega deals that Oracle has become famous for, the most recent one being the pending $7.4 billion acquisition of Sun Microsystems (JAVA). Still, it doesn’t seem to be a tiny one, either.

GoldenGate booked about $100 million in revenue over the last year, estimates research company 451 Group, which reported that a deal was in the works last month.

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Shares of database vendor Sybase (SY), which competes with Oracle (ORCL), are up $1.46, or almost 5 percent, today at $33.85, after the company reported sales fell 2 percent from the year-earlier period but still beat analysts’ estimates. Profit was also higher than expected. The company forecast in line with expectations, though the forecast is affected by the negative impact of a higher dollar.

Sybase revenue fell to $278 million from $287.2 million, but beat an average estimate of $273, while profit per share of 56 cents per share, excluding some costs, was ahead of the consensus 52 cents estimates.

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SAP’s new CEO Leo Apotheker says the software giant will focus on its core software business, even as its rivals expand beyond their traditional boundaries.

The latest trend in the tech industry–at least among its biggest companies–is to offer products and services that used to be provided by partners. H-P (HPQ) expanded into consulting last year when it bought EDS, Cisco announced in March that it was moving into the server business, in April SAP’s (SAP) software rival Oracle agreed to buy hardware maker Sun Microsystems (JAVA), and in June, Intel (INTC), which makes chips, agreed to buy a software company.

SAP has no such ambition, says Apotheker. Whereas Cisco (CSCO), Oracle (ORCL) et al. say that they can reduce complexity for customers by developing all-in-one products, SAP plans to keep making software and work with partners to achieve the same goal. “People want to reduce complexity, but they don’t want it all to come from one company,” he says.

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Oracle (ORCL) CEO Larry Ellison, not busy enough already with his various acquisitions, has been ensnared in a spy drama involving an employee of his BMW Oracle yacht racing team.

The New York Post reported today that Swiss billionaire Ernesto Bertarelli, who owns the rival Alinghi team, the current owner of the America’s Cup, asserted in court in Manhattan that an employee of BMW Oracle was arrested by Interpol (memo to self: find more reasons to link to Interpol) after attempting “to illegally break into facilities to take photographs and secure information” about the design of Bertarelli’s boat. Bertarelli’s team said the actions of the accused Ellison spy, Jean Antonie Bonnaveau, are still being investigated by Swiss and French authorities.

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Oracle (ORCL) shares actually have gained ground since the company announced its plans to acquire Sun Microsystems (JAVA) thanks in part to the company’s promises to make the deal rapidly accretive to earnings. But in their enthusiasm for the deal, investors may be ignoring some significant risks.

Cowen analyst Peter Goldmacher today cut his rating on ORCL to Neutral from Outperform, asserting that the Street’s assumptions about how the the deal will boost profits are overly ambitious “given the considerable challenges” associated with the combination. He contends the decision to do the deal was largely defensive, as Oracle sought to keep Java out of the hands of IBM (IBM), given that the programming language is the base for its entire software stack, and notes that Sun is 4x larger than any company ORCL has ever bought.

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Oracle (ORCL) pounced on Sun Microsystems (JAVA) a week ago, agreeing to buy the battered server maker for $5.6 billion, excluding Sun’s cash. On the surface, the tech world responded relatively quietly to Oracle’s bombshell by getting about the business of reporting earnings. Behind closed doors, however, the entire industry has been turned topsy-turvy.

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Sun (JAVA) Microsystems will issue its quarterly financial results on Tuesday afternoon, right on schedule, despite the looming takeover by Oracle (ORCL). But Sun won’t hold a conference call; the company says it plans to simply post a press release and associated financial slides on its Web site.

That’s not surprising, given the circumstances. It’s certainly a change, though, for one of the chattiest companies in Silicon Valley. And it raises questions about what could happen, communications-wise, because of the deal.

Sun’s leaders have not said anything to speak of since the transaction was announced last Monday.

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In a stunning turn of events, Oracle (ORCL) this morning announced perhaps its most aggressive acquisition yet, agreeing to acquire Sun Microsystems (JAVA) for $9.50 a share in cash, or $7.4 billion. Net of balance sheet cash and debt, the deal is worth $5.6 billion. The news follows the reported recent collapse of talks between IBM (IBM) and Sun.

Oracle said it expects the deal to be at least 15 cents accretive to earnings on a non-GAAP basis in the first full year after closing, contributing over $1.5 billion to non-GAAP profit in the first year, and over $2 billion in the second year.

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Yesterday’s rumors about a potential acquisition by Oracle (ORCL) of Red Hat (RHT) have apparently faded, but Larry Ellison’s appetite for doing deals is never sated. Whether or not Oracle decides to take a run at Red Hat, it is not going out on a limb to suggest that at some point Ellison is going to get the itch and make more acquisitions.

Research firm Wedge Partners today took a look at the potential targets and came up with plenty of candidates. They think the company is going to enter a more active acquisition period, with most of the focus on smaller venture-backed companies, but adds that they could do “a handful of acquisitions” in the $100 million to $500 million range. And maybe a bigger deal or two. In particular, they see Oracle targeting deals in Software as a Service, virtualization and health-care technology.

Here’s Wedge’s list of potential targets in each of the three sectors:
Software as a Service:

Salesforce.com (CRM): Wedge notes that Ellison was an early investor and still holds his position; CEO Marc Benioff is a former Oracle exec. Wedge contends that “despite the bluster from both companies,” they rarely compete. They assert that Oracle’s SaaS offering is “greatly inferior” to CRM’s.

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Oracle (ORCL) shares today have rallied impressively following last night’s better-than-expected results for its fiscal third quarter ended in February. The analysts who track the stock were generally impressed with the numbers; I would note that is the same crew that had been cutting expectations heading into the quarter. (Though even most of the estimate-cutters continued to recommend the stock.)

Guidance for the May quarter was below the consensus, although a few analysts asserted that they were likely in line with the “whisper” numbers expected by the buy side. Pacific Crest’s Brendan Barnicle points out that the Street seems to have been caught by surprise in terms of the strength of the company’s European business in the latest quarter; he notes that most analysts do their channel checks in North America, where business was slower.

Overall, the Street continues to view Oracle’s large installed base of maintenance-paying enterprise customers as a protective shield from the broader economic downturn; to many, Redwood Shores looks like a pretty good place to hide out from the storm.

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Thomas Weisel Partners analyst Tim Klasell this morning trimmed his EPS estimates and price target for Oracle (ORCL) ahead of the company’s earnings report for the fiscal third quarter ended February, which is due on Wednesday afternoon.

For the May 2009 fiscal year, Klasell cuts his EPS estimate to $1.38, from $1.41. For FY 2010, he goes to $1.51, from $1.58. Klasell’s new price target is $20, down from $24. Klasell maintains an Overweight rating on the stock.

“Our checks indicate that deals continue to be signed, but many deals are subject to downsizing and [there are] some reports of greater-than-normal discounting,” he writes in a research note.

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Here’s the latest theory from Trip Chowdhry, the tech analyst at Global Equities Research: Silicon Valley is headed for a four-day work week in 2009.

His notion is that the recent layoff spree in the Valley will slow down; but that companies trying to hold on to their talent while awaiting a recovery will shift to a four-day work week instead. Save money, but keep your talent. At least that’s the theory.

Chowdhry contends that National Semiconductor (NSM) will adopt a four-day work week for all of 2009, and that Cisco Systems (CSCO) is considering the same idea. He says his contacts believe almost every Silicon Valley company could adopt the idea, including Oracle (ORCL).

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Friedman Billings Ramsey’s David Hilal this morning became the latest analyst to cut estimates on Oracle (ORCL) ahead of the software giant’s earnings report for the November quarter, which will be announced after the close on Dec. 18.

Oracle’s forecast for the quarter was for revenue to be up 9-12 percent, or 12-15 percent on a constant currency basis; it projected new license growth of 2-12 percent, or 5-15 percent on a constant currency basis.

Hilal thinks the company will be at the low end of guidance on a constant currency basis, and could miss on an as-reported basis.

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