Oracle’s 15 Key Plot Points in Its Struggle with the EC over Buying Sun Microsystems

Oracle’s 15 Key Plot Points in Its Struggle with the EC over Buying Sun Microsystems

It’s been a long, strange and expensive trip for Oracle in its quest to add Sun Microsystems to its list of company acquisitions. And the final chapter isn’t yet written.

This started in early 2009 when word got out that Sun was up for sale. At the time, IBM was first in line as a buyer, and that scenario nearly happened. The transaction was only a few days from fruition in mid-April when some major issues got in the way and the deal fell through. A few days later, on April 20, Oracle surprised a lot of people by announcing that it would acquire Sun for about $7.4 billion, less Sun’s cash on hand.

Since April 20, it’s been a rocky road for Oracle and for Sun, which is losing a lot of potential sales due to the uncertainty of the situation. Oracle CEO Larry Ellison has said he believes Sun is losing about $100 million per month, and that’s a lot of money for anyone — even the billionaire Oracle CEO.

The major sticking point is an open-source database that Sun bought for $1 billion two years ago: MySQL. The EC is withholding its blessing on the deal until it is satisfied that MySQL will be allowed to innovate and compete fairly in the IT marketplace. The fact that Oracle’s own proprietary database often competes directly against it is seen as a huge conflict of interest; obviously, this has been the crux of the problem. Ellison has said that MySQL does not compete with his company’s bread-and-butter databases. This eWEEK slide show covers the 15 most important plot points in this lingering international IT saga, with the final chapter still to be written.

April 20: Oracle Announces Intention to Buy Sun for $9.50 per share ($7.4 billion)

Oracle decides it wants to get into the data center systems business, and it believes Sun is the right horse to ride at this time.

April 23: Immediate Mixed Reaction from the MySQL Community

Some of the earliest reactions of the MySQL community to the idea of Oracle owning the MySQL codebase were recorded here at eWEEK. Three days after the announcement, attendees at the MySQL Conference in Santa Clara were asked their opinions. The question was generally met with a smile, then followed by a measured, thoughtful response. Answers ranged from an absolute “No way” to equally absolute “Yes, it will be great for MySQL,” with middle-of-road opinions thrown into the mix.

May 8: Sun Shareholders Sue to Stop the Acquisition

Disgruntled Sun Microsystems shareholders join forces to file a total of three class action suits to block Oracle’s acquisition of Sun. The legal actions claim that the $7.4 billion compensation proposed by Oracle is unfair and inadequate. MySQL isn’t mentioned.

June 2: Ellison Says Oracle Will Continue to Invest in Sun IP

At the annual JavaOne conference in San Francisco, CEO Larry Ellison talked solely about Java at this early stage, because he knew the legal storm clouds were gathering over MySQL.

June 29: Sun Calls DOJ Slowdown of Oracle Deal Simply an Irritation

The federal government decides to spend more time performing due diligence on the proposed Oracle-Sun merger, perhaps 30 to 60 more days. Sun says this is not unexpected due to the size of the IT infrastructure transaction.

July 16: Sun Shareholders Vote to Accept Oracle Acquisition

Those who sued backed down, and 62 percent of the outstanding shares were voted in favor of the deal. Due diligence continues at the federal level.

Aug. 3: European Commission Begins Its Legal Investigation into the Deal

The EC, which represents 27 European nations, schedules an antitrust review date of Sep. 3 to discuss the multinational companies’ proposed deal. It will look closely at two main areas of concern: Sun’s Java networking software franchise and the enterprise parallel database market. It will soon drop the Java talk and focus solely on MySQL.

Aug. 20: DOJ Blesses the Acquisition

The U.S. Department of Justice, charged with enforcing federal antitrust laws, takes a full four months but ultimately sanctions the deal as not being a threat to competition in the parallel database market. Industry analysts tell eWEEK they do not expect this to be problematic for the EC, either. Wrong!

Aug. 21: Analysts Say EC Will Scrutinize but Ultimately Sanction the Acquisition

This still may indeed happen, but the MySQL issue only gets more heated from this day forward.

Oct. 20: Stallman Urges EC to Stop Oracle Acquisition of Sun

Digital civil liberties organization Open Rights Group, Knowledge Ecology International and open source software guru Richard Stallman tell the EC in a letter that they are concerned about Oracle’s possible squashing of competition in the database market by abandoning MySQL. A deluge of protests begins after this event.

Nov. 6: Former CEO Says Installed Base Will Keep MySQL Independent

In an exclusive interview with eWEEK, former MySQL CEO Marten Mickos says “there’s no rational argument” for preventing Oracle from acquiring all of Sun, including MySQL with its open-source relational database software.

Nov. 9: EC Hands Down Formal Objection to Oracle-Sun Transaction

EC regulators determine what they believe is a major conflict of interest in the world’s largest commercial database company owning its largest open-source competitor.

Nov. 25: U.S. Senators Ask EC to Sanction the Deal

Concerned as much about the possible loss of thousands of jobs as the survival of a major U.S. corporation, a group of U.S. senators ask European Commission antitrust regulators to end their investigation of Oracle’s acquisition of Sun and simply approve the deal.

Dec. 1: Oracle Applications Users Group Supports Addition of Sun

In a letter to the EC, OAUG President Raymond Payne wrote that Oracle’s acquisition of Sun would simplify the integration process associated with merging several technologies, supporting all activities, from hardware to the operating system to middleware to the applications and the database.

Dec. 14 : Oracle Submits 10-Point List of Commitments to Safeguard MySQL

Oracle pleads its case before the EC on Dec. 10, then offers a 10-point list of commitments it says it will guarantee for five years if the acquisition is sanctioned. The company is now willing to create a separate entity within a combined Oracle-Sun to manage Sun’s MySQL open database business in order to get the acquisition completed.