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Oracle’s complicated eight-month-long mission to annex Sun Microsystems is finally coming to an end.
It’s not officially a done deal, but eWEEK has learned through knowledgeable sources that the standoff between Oracle and the antitrust regulators of the European Commission has been broken and that an agreement is probably imminent.
The Brussels-based EC, which serves as the law enforcement body of the 27-nation European Union, is due to make a decision no later than Jan. 27, 2010, about whether to sanction the acquisition, so that Oracle can acquire Sun and continue to do business in Europe as a full-service systems vendor.
The EC likely will use most or all of that time before announcing its decision.
The major sticking point is an open-source database that Sun bought for $1 billion two years ago: MySQL. The EC has been withholding its blessing on the deal since August 2009, ostensibly needing to be satisfied that MySQL will be allowed to innovate and compete fairly in the IT marketplace.
The assertion that Oracle’s own proprietary database often competes directly against MySQL is seen by many industry people as an obvious conflict of interest, causing most of the friction. Oracle CEO/founder Larry Ellison, of course, contends that MySQL does not compete directly with his company’s highly profitable databases, but a large number of people working in the fields disagree.
Oracle’s legal team was able to get its message across to highly skeptical European Commission antitrust regulators at contentious closed-door hearings Dec. 10 and 11. That message: Sun’s valuable intellectual property-and in particular, the popular MySQL, which has recorded hundreds of millions of downloads-will be in good hands after the buy is consummated, and the markets need not worry.
Weekend Communications Turned the Tide
The case study staff who ran the hearings didn’t buy Oracle’s story; in fact, they practically spat in the Oracle counsel’s eye. However, following some post-hearing communications between Oracle and the EC’s senior competition management over the weekend, the senior staff overrode the case study staff’s position and softened the EC’s overall stance. Later, that last roadblock was shoved aside, eWEEK has learned.
The results of this agreement would be far-reaching. For one, Sun-which has been losing more than $100 million per month for most of 2009, according to Ellison himself-will be safe within the confines of its new, deep-pockets owner. Sun’s customers will breathe a long-delayed sigh of relief, knowing that their service agreements will be maintained. Oracle takes over the Java franchise, StorageTek and numerous other divisions to finally become a full-fledged IT systems company.
And yes, Oracle assumes control of the MySQL codebase and stewardship of its worldwide community of developers.
Many MySQL Community Members Are Steamed
There are other ramifications. Oracle, with another of its most important database competitors safely within its own jurisdiction, will be watched like a hawk by a very steamed MySQL community. Other open-source advocates and anybody who has anything to do with the LAMP (Linux, Apache, MySQL, Perl/Ruby) enterprise stack outside the MySQL realm will do likewise.
That the EC now believes the Oracle fox watching over the MySQL chicken coop will remain on his honor for five years took quite a bit of doing. But Oracle’s ploy worked, and for three major reasons:
No. 1: A 10-point checklist of capitulations drawn up by Oracle and presented to the EC over the weekend of Dec. 12 and 13 and published Dec. 14 following the nasty hearings. Oracle’s appearance of humility here did the political trick, eWEEK learned.
Where that list came from is the subject of some talk. Was it thoughtfully drawn up by the Oracle legal team, with help from such international open-source stars as MySQL’s Zack Urlocker, Oracle Linux guru Wim Coekaerts or Sun Linux expert (and Debian Linux co-creator) Ian Murdock? Or was it simply drawn from the blog of MySQL co-creator Michael (Monty) Widenius, who laid out on a platter on Dec. 12 what Oracle needed to do to recover from the disaster it experienced in the EC hearings? (Oracle’s lead counsel was angry enough to have uttered: “We’ll see you in court” at the end of the hearings.)
No. 2: It didn’t hurt that some hugely important multinational Oracle and MySQL customers-Ericsson was one of them-came to the aid of the company, explaining firsthand how much they used both Oracle and MySQL and why it would cripple their IT operations if Sun were to permanently sunset.
No. 3: The influence of the wizard behind the curtain, Larry Ellison. The consensus among analysts and industry people is this: What Larry wants, Larry usually gets.
It’s been a rocky road this year for Oracle and Sun, which is losing a lot of potential sales due to the uncertainty of the situation. IBM, Hewlett-Packard, Dell, Microsoft, Red Hat, Novell and other companies haven’t been shy about reminding customers and potential customers about Sun’s travails during the last year.
There is always the chance that some other factor could derail the deal before Jan. 27, but it’s not likely. The people that matter-EC’s senior competition directorate, dubbed DG Comp, for Director General-Competition-seem satisfied that MySQL will continue to thrive with Oracle as its new mothership.