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SUN and Oracle

by Roberto V. Zicari on April 21, 2009

As you have heard, Sun Microsystems and Oracle Corporation announced on April 20, 2009 they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt.

What impact will this acquisition have on the database market? What will happen to MySQL?

I asked these questions to some of our experts.

Here is what Leon Guzenda , CTO Objectivity have to say on this:

Q1.What impact will this acquisition have on the database market?
Leon Guzenda: “I found this very interesting. There are multiple facets to the acquisition. In many ways this is just another consolidation of traditional database technologies. MySQL is hugely popular in the web site market but wasn’t generating enough revenue to put a serious dent in Oracle’s, IBM’s and Microsoft’s domination of the medium and high end market. It will increase Oracle’s competitiveness, particularly against SQL Server. EnterpriseDB, based on the open source PostgreSQL engine, has been aggressively pursuing Oracle customers with a product that is a cheaper, plug compatible alternative to Oracle. I thing that Oracle will now be able to remove EnterpriseDB’s price advantage with a similar offering based on MySQL.”

Q.2 What will happen to MySQL?
Leon Guzenda:“I’m sure that Oracle will not want to lose the huge base of loyal MySQL users, many of whom aren’t database experts but merely use it in support of other web tools, such as Moodle, Movable Type and WordPress, or shopping carts. I think they’ll maintain the open source community, in the same way that Sun supported OpenOffice and then MySQL. I also think that they’ll build better integration with their core database product to provide a smooth migration path as sites grow. They might inhibit some of the scalability of MySQL to encourage this, but it will be hard if there are open source alternatives.

Larry Ellison has placed a lot of emphasis on being able to provide complete solutions. He has now added the server, networking, storage, virtualization, cloud computing and open source DBMS components to his current Linux and application solutions. That puts Oracle in an even stronger position than before, particularly against Microsoft, but also against IBM, which was the only one-stop provider before. I suspect that he may sell the server, desktop and microelectronics business, perhaps to Fujitsu, but if he can overcome user resistance to being locked in to a single supplier, IBM will have a new kind of competitor to worry about.”

Rick Cattell , who used to work for several years at SUN, comments:

Q1. What impact will this acquisition have on the database market?
Rick Cattell: “Good question! I believe the impact will depend on how Oracle handles the acquisition, and how the other players react. MySQL users may be nervous that Oracle won’t be motivated to market against its flagship product with an open source product. Hardware vendors like Dell, HP, and IBM may be nervous that Oracle will be less motivated in their porting and tuning for other platforms. Open source contributors who were nervous that one vendor (MySQL) controlled what went into new
releases may now be more nervous with Oracle in control… more of their effort may go to PostgreSQL, JavaDB, and other alternatives. My guess is that short-term people will play wait-and-see.”

Q.2 What will happen to MySQL?
Rick Cattell:” The answer to this question will determine the answer to the previous one. I will point out that Oracle did not kill InnoDB or SleepyCat’s BerkeleyDB when they acquired these open source products. Oracle could use MySQL as a way to get market share at the low end that they can steer to Oracle at the high end. I believe that Oracle has been outstandingly smart in their acquisitions over the past 5 years: they are expanding their control and their revenue in every layer of the stack. With the Sun acquisition, they now have everything from the CPU up through applications. In many ways their story is now looking better than IBM’s.”

Robert Greene , V.P. Open Source Operations at Versant Corporation, adds:

Q1.What impact will this acquisition have on the database market?
Robert Greene: “I think this will have a relatively immaterial impact on the database market. I think the acquisition made a lot of sense for Oracle and frankly I was surprised about the IBM announcement ( which did not materialize ) as I was thinking it should have been Oracle’s move. Software is under constant pressure of commoditization and the future resides in a competitive hardware and software stack where margins although tight, cannot be undermined. In many ways we are seeing the final consolidation of a market to the traditional 3 big players. IBM, HP and now Oracle with complete hardware, software and professional service stacks. I hear a lot of concern about the impact of this acquisition to Java, more so than to databases. I think whether in Oracle or IBM’s hands, Java is safe to remain as the primary software platform competition to the Microsoft .NET stack. Java is in safe haven with Oracle. ”

Q.2 What will happen to MySQL?:
Robert Greene:” It’s anybody’s guess, but I think the most reasonable expectation for the impact to MySQL would be to look at the impact to BerkeleyDB after it’s acquisition by Oracle. Is the adoption of BerkeleyDB up or down? Is the support and community of BerkeleyDB up or down? Is the price of BerkeleyDB up or down? If one looks at the answers to those questions, it is likely you will find the future of MySQL. Perhaps it would be good to hear from the BerkeleyDB community in order to get the best first hand reaction. I do know the Java version of BerkeleyDB costs $5,800 per CPU, which is significantly more than it’s cost in the days prior to Oracle. That observation alone tells me that traditional database technology just got more expensive. Of course, BerkeleyDB did not represent a direct assault on Oracle database revenues as has MySQL in the past. As an ODB guy, I can only see this news as a positive for the uptick of alternative database solutions. “

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One Comment Leave one →
  1. Congratulations for Oracle.Kalamazoo

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