Information technology company Oracle Corp. announced April 20 it is buying Sun Microsystems Inc. in a cash deal the company valued at $7.4 billion, after IBM abandoned its bid to buy the networking equipment maker.

Redwood Shores, Calif.-based Oracle reportedly will buy Sun shares for $9.50 each in cash. Net of Sun's cash and debt, the transaction is valued at $5.6 billion, Oracle said.

Oracle supplies enterprise and other software to universities, colleges, school systems, and other, mostly large organizations, while Sun is a major vendor of server computers, data storage machines, and business software.

The deal could pose a new challenge to Microsoft, because Sun


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