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EC opens deeper probe of Oracle-Sun merger

Paul Meller and Chris Kanaracus | Sept. 4, 2009
Regulator has "serious concerns" about the deal's impact on competition in the database market.

Despite the extended probe, industry observers polled Thursday expressed doubt the merger will ultimately be blocked.

"I expect Oracle to appeal, and to appeal, until it gets its way," said Redmonk analyst James Governor via e-mail. "All in all, I can understand why the EU is taking the action, but it's far from clear it will be successful. Oracle's legal team is pretty good."

"It's interesting to me that the [Commission] chose to focus most on MySQL," he added. "Short of asking Oracle to spin off MySQL, its not clear how a remedy could work."

The Commission could ask that Oracle help foster a market for third-party MySQL services, Governor said. But Oracle would be justified to say there is already evidence of one, given efforts like Monty Program Ab. The company, founded by MySQL creator Michael "Monty" Widenius, provides MySQL services and has also created an offshoot of the MySQL codebase.

Moreover, MySQL is "really a small part of Sun's business," and not "an enterprise backbone," whereas its hardware systems are, Governor said.

Overall, it makes sense that the Commission has taken this action, according to Roger Burkhardt, CEO of the open-source database company Ingres.

"I'm not surprised Europe is taking the lead on this. We find [European countries] are more concerned with promoting the use of open-source inside and outside government," he said.

However, it's unlikely the Commission will find cause to block the merger, he said.

MySQL, best known for its use supporting Web applications, "doesn't functionally compete with Oracle," and the amount of revenue Sun generates from software is small, Burkhardt said. "This is an acquisition of a hardware company by Oracle."

If and when the deal is completed, MySQL customers may have some things to worry about, such as increased fees for embedded licenses or support subscriptions, said developer and onetime MySQL employee Roland Bouman in a blog post.

But an Oracle-owned MySQL also presents new opportunities for both customers and Oracle itself, according to Bouman.

"It has been speculated that Oracle may try to 'upsell' the Oracle RDBMS to current MySQL enterprise users. However, I don't think that would be the brightest of moves," he wrote. "People running MySQL for Web-related applications won't move to Oracle. Period."

Instead, Oracle "can offer support for the most popular Web stack in the world," he added. "Now all these enterprise customers running expensive Oracle installations can finally build cheap Web sites based on MySQL and even get support from Oracle on connecting their back-end enterprise Oracle instances to the MySQL Web front ends."

Oracle could also benefit from the give-and-take and constant community interaction afforded by the open-source development process, which helps development teams understand what users really need, he said.

 

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