When Oracle agreed to buy Sun Microsystems for $7.4 billion in April, the headlines made much of the software maker’s decision to enter the computer business 30 years late. At less than 10 per cent of sales, Sun’s software business seemed an afterthought.
But Sun’s software is now center stage after European competition regulators said on Thursday that they would withhold approval for the deal until they finish probing the impact of the Oracle-Sun merger on the database software market. The decision means the transaction faces at least a four-month delay, pushing it into early next year.
Any delay is costly for Oracle. Sun’s sales have plunged as key financial, government and communications customers have held back purchases of computers and storage until Oracle is able to clarify its long-run commitment to Sun hardware and software products.
The commission is debating whether, or under what conditions, to allow Oracle to acquire Sun’s MySQL database software. Given that the business brings in only $100 million in quarterly revenue, less than 1/25th of Sun sales, the easy way out would be for Oracle to jettison MySQL. However, that would be a mistake.
MySQL is a free, or low-cost, database that powers the vast majority of the world’s hottest Web sites, blogs and open-source businesses, including Facebook, Google, YouTube and Wikipedia. At issue is the fact that Oracle is already the world’s biggest supplier of database software, the underpinning for many of the world’s biggest information storehouses.
MySQL is the alternative to Oracle and its main rivals, IBM and Microsoft, which between them generate most of the world’s database sales.
There is a valid argument that MySQL is vastly more trouble than it is worth, and that Oracle should sell or give the software code away. This is in part because MySQL customers tend to be fiercely independent grassroots developers, completely unlike Oracle’s traditional customers in corporate and government information management.
Critics claim that Oracle has no interest in seeing MySQL survive and that it is only interested in converting its customers into paying Oracle database users.
Nevertheless, MySQL represents an innovation pipeline of inestimable value to Oracle over the next five to 10 years, assuming Oracle can adapt its dressed-down business practices to court Web developers, the most independent-minded wing of the software world.
It would also help Oracle compete more effectively against old rival Microsoft Corp, a goal the EU authorities should embrace.
Java, the programming language invented by Sun, forms the basis of most of the world’s modern software built outside of Microsoft.
Combined with Sun’s software for managing the identities of network users and its Open Office suite of productivity software applications, Oracle could launch a far broader attack on classic Microsoft strongholds in desktop applications and messaging, especially as these markets move onto the Web.
Far from being a stub business, Sun’s software arm could hold the key to a vast new round of industry competition.
But Sun’s software is now center stage after European competition regulators said on Thursday that they would withhold approval for the deal until they finish probing the impact of the Oracle-Sun merger on the database software market. The decision means the transaction faces at least a four-month delay, pushing it into early next year.
Any delay is costly for Oracle. Sun’s sales have plunged as key financial, government and communications customers have held back purchases of computers and storage until Oracle is able to clarify its long-run commitment to Sun hardware and software products.
The commission is debating whether, or under what conditions, to allow Oracle to acquire Sun’s MySQL database software. Given that the business brings in only $100 million in quarterly revenue, less than 1/25th of Sun sales, the easy way out would be for Oracle to jettison MySQL. However, that would be a mistake.
MySQL is a free, or low-cost, database that powers the vast majority of the world’s hottest Web sites, blogs and open-source businesses, including Facebook, Google, YouTube and Wikipedia. At issue is the fact that Oracle is already the world’s biggest supplier of database software, the underpinning for many of the world’s biggest information storehouses.
MySQL is the alternative to Oracle and its main rivals, IBM and Microsoft, which between them generate most of the world’s database sales.
There is a valid argument that MySQL is vastly more trouble than it is worth, and that Oracle should sell or give the software code away. This is in part because MySQL customers tend to be fiercely independent grassroots developers, completely unlike Oracle’s traditional customers in corporate and government information management.
Critics claim that Oracle has no interest in seeing MySQL survive and that it is only interested in converting its customers into paying Oracle database users.
Nevertheless, MySQL represents an innovation pipeline of inestimable value to Oracle over the next five to 10 years, assuming Oracle can adapt its dressed-down business practices to court Web developers, the most independent-minded wing of the software world.
It would also help Oracle compete more effectively against old rival Microsoft Corp
Java, the programming language invented by Sun, forms the basis of most of the world’s modern software built outside of Microsoft.
Combined with Sun’s software for managing the identities of network users and its Open Office suite of productivity software applications, Oracle could launch a far broader attack on classic Microsoft strongholds in desktop applications and messaging, especially as these markets move onto the Web.
Far from being a stub business, Sun’s software arm could hold the key to a vast new round of industry competition.
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