Oracle's surprise acquisition of Sun Microsystems may be marginally better for Microsoft than the previously proposed IBM-Sun deal would have been, but it still promises to create stronger competition for the Redmond company in key areas of its business.

That's what we're hearing from analysts this morning following Oracle's agreement to buy Sun for about $7.4 billion. It's enough of a shocker that most people -- including Microsoft executives -- are still digesting the details and weighing the impact. Asked about the deal in Moscow this morning, Microsoft CEO Steve Ballmer reportedly said he was "very surprised" and needed to think more about it.

At first blush, the implications seem to be biggest for Microsoft's .NET development platform and, by extension, the Windows ecosystem that feeds off that platform, said analyst Rob Helm, research director at the Directions on Microsoft research firm in Kirkland. That's because the deal gives Oracle Sun's Java technology.

"Microsoft's No. 1 platform competitor is the Java platform, and it puts Java in the hands of a company with the resources to keep it going," Helm said.

Wrote Sarah Friar, a Goldman Sachs analyst, in a note to clients this morning: "From a software perspective, we believe Oracle is in a better position to maximize the value of Sun’s key software assets. Java, in particular, gives Oracle control over a computing language with the strongest developer base in the enterprise."

The situation is less clear for MySQL, the popular open-source database software acquired by Sun last year. Depending on whether Oracle treats MySQL as a competitor or complement to its own database products, the deal could be good or bad for MySQL. As a result, the implications for Microsoft's SQL Server database software aren't as certain.

"It's not clear what Oracle could do with (MySQL), but it’s quite possible it could bury the thing," Helm said.

Disagreeing was Laura DiDio, an analyst with Information Technology Intelligence Corp. outside of Boston.

"The combination of Oracle’s own high end database combined with MySQL is the hidden gem in this deal," DiDio wrote in an email, responding to our questions about the deal. "It gives Oracle the ability to pack a powerful one-two punch and flank its competition on the high and low end of the market."

On a broader level, DiDio called the acquisition a good thing for Oracle and Sun customers, and a wake-up call for competitors. 

"Oracle and Sun rivals IBM, HP, Microsoft and Red Hat are no doubt surprised," she wrote. "They must respond with decisive counter-marketing and product plans across the broad spectrum of software, database applications, hardware, virtualization, cloud computing and after-market technical service and support."