78 Comments

Summary:

Oracle’s decision to buy Sun Microsystems for $7.4 billion is not only going to shake up the database business — it’s likely to energize the Java community, too. And of course, the deal puts the insurgent MySQL database in the hands of incumbent Oracle. Whatever the long-term implications, in the short term expect massive layoffs as Oracle tries to squeeze profits out of Sun.

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Oracle Campus in San Francisco Bay Area, Calif. Photo via Flickr by Steve Jurvetson

Updated: Less than a month after it walked away from a $7 billion deal with IBM, Sun Microsystems says that it has entered into a definitive merger agreement with database and enterprise software giant Oracle. 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. It’s been approved by Sun’s board of directors.

Well if not IBM, someone was going to buy Sun, for the company was being actively shopped around to buyers. I thought Cisco should buy Sun, and so did 66 percent of 1,120 of our readers who took part in an online poll. At this price, it looks like Oracle found itself yet another bargain and in one fell swoop became a worthy competitor to IBM. It allows Oracle to become a player in the cloud computing business. More importantly, the company ends up acquiring MySQL, the upstart database that has been viewed as Oracle’s Achilles’ heel. In one fell swoop, it has taken out its No. 1 competitor. Oracle says that this acquisition is to be accretive to its earnings by at least 15 cents on a non-GAAP basis in the first full year after closing.The acquired business will contribute over $1.5 billion to Oracle’s non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. “This would make the Sun acquisition more profitable in per-share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined,” said Oracle President Safra Catz in a statement.

“Oracle will be the only company that can engineer an integrated system -– applications to disk -– where all the pieces fit and work together so customers do not have to do it themselves,” said Oracle CEO Larry Ellison. Loose translation: IBM, you’d better watch out. Oracle now has the same kind of hardware and software capabilities, including providing large storage and computing clusters, that make IBM a fearsome player in the corporate arena.

Oracle touts the advantages of owning Java and Solaris in this press release, but mentions nothing of the real jewel in the crown: MySQL. The $1 billion acquisition has been a point of contention for Sun’s detractors, but the fact is that despite most of the MySQL team having quit, the little upstart database keeps on growing and growing. Oracle also gets some virtualization technologies with the Sun buy. Still, if you’re an open source enthusiast, you have to worry about this deal’s impact on open-source projects such as Open Office and MySQL. Oracle is known to squeeze its acquisitions for every single penny.

Update with views on MySQL: I am surprised by the lack of any mention of open source or MySQL, two of current CEO Jonathan Schwartz’s biggest corporate mantras, in the press release. MySQL is clearly a big prize for Oracle. Oracle’s products find no room in most of the new web companies — most preferring either MySQL or other open-source offerings. On the high end as well, Oracle has been competing with the MySQL Cluster offering. In addition, several startups have started to develop a new kind of data-store ecosystem based on MySQL, which is competitive with Oracle’s database offerings. In short, Oracle has taken out its No. 1 threat by buying Sun.

The deal is very likely going to result in exits from the MySQL team and cause some sort of a disruption. If I were Oracle, I would be paying a lot more attention to the MySQL team. Why? Because they have developers — many of them focused on developing things for the cloud and web services. These developers are the best way to keep Microsoft at bay as well.

Update: Since publishing the original post, I’ve been in touch with some of the folks who are especially well-versed in the ways of Oracle and Sun. Here are some highlights and questions from my conversations:

* The deal could mean trouble for Sybase, which has a lot of customers on Solaris.
* It could prove challenging for non-database users of Solaris, for it’s not clear how Oracle will treat Solaris.
* It’s good news for Java, as two major corporate giants will be supporting it and will be forced to play nice with each other.
* Oracle will keep MySQL going mostly because it can act as a funnel for further business opportunities.

Miko Matsumura, VP and deputy CTO at Software AG, has a contrarian take on the merger. He predicts it will be a disaster, with thousands of layoffs. He is right about the layoffs; President Safra Catz was pretty explicit in saying that Sun’s hardware business will be profitable, where one could expect the research team to be slashed along with other products.

On the Oracle side of things, one does wonder how will they digest this deal, which is definitely more complex than, say, PeopleSoft or BEA Systems. As Matsumura said to me in an email, “The boldness of this play suggests to me that Larry and Chuck Phillips believe that it’s going to get worse before it gets better. This is a cost-synergy play where Oracle burns most of the cost out of Sun and scoops up some of the dwindling revenue in the form of margins.”

  1. I don’t know the future of MySQL, OpenOffice, but there is bright future for Java. Good to watch enterprise cloud war.

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    1. Absolutely. I think it would be interesting to see how it shakes out. Java (oracle) vs Java (IBM) …. let the battle begin in earnest.

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  2. The MySQL angle intrigues me.
    I can’t see the MySQL ‘close enough’ attitude to data going down well with Oracle developers – or their PR machine.

    At a wild guess, Oracle will offer to create ‘not for profit foundation’ for MySQL as a sop to the regulators.

    This is going to be an interesting test of how effective an open source license is at protecting a body of code from an owner who – to date at least – has shown no opensource instincts.

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    1. I can imagine them putting an Oracle backend on MySQL and trying to move the MySQL companies to their “accelerator”. MySQL has always been more about “free as in beer”, than “free as in freedom”.

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  3. end of an era.

    but watch out for them layoffs. blood on 101 from whipple to marsh. this will be ugly.

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    1. oh that is graphic….and yes the layoffs are going to be brutal. On the upside… some serious Sun talent will hit the market which is always a good thing for they do are great engineers and can create great stuff.

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      1. Hmmm…are you sure there’s still serious talent left at Sun?

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  4. From an open source perspective IBM would have been better. But I am now on the side that open source as a business does not make sense after a certain scale. It is great as an enabler , not a business model in itself

    http://blog.gandalf-lab.com/2009/03/death-of-billion-dollar-opensource.html

    My net experience with sun as an investor: Jonathan failed and I lost $20K personally

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  5. I think Oracle will nurture MySQL – it will give them entrance into the cloud and a whole new market that they can upsell to over time. More importantly it will allow Oracle to finally kill of MS SQL.

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    1. Charan – nice sentiment but a little naive. Oracle does not want MySQL to be around at all – because as the author put it nicely. There are very few Internet startups who do anything with Oracle. Oracle’s business model is old – their vision is old, and old companies love them..

      It’s a sad day for MySQL and the rest of us..

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      1. Apple and amazon and ebay are big users of oracle. All of them have large web presences. In fact most of the stuff you have bought online went through an oracle database. That is no mean feat

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  6. Whether one likes it or not, this is an industry-changing development. One big take-away for me is that one of the last tech titans is finally on-board with cloud computing!

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  7. Oracle also adds an OS to its stack. This is going to be interesting!

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  8. Perhaps Schwartz wasn’t so wrong to have acquired MySQL, even for $1b… seems like that made Sun a very attractive target for Oracle, even if their SPARC business was dropping from the financial crisis.

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  9. Giovanni Glass Monday, April 20, 2009

    MySQL is GPL software. It’s free as in speech. So long as people use it and believe in its worth, you can’t kill it. Oracle can position MySQL any way it wants against Oracle DB, but if they even think of limiting it, slowing development, bad mouthing it, developers will fork it and Oracle will be hurting the trust of the open source community.

    Just because Oracle “has taken out its No. 1 threat” doesn’t mean it will affect open source projects based on MySQL. Oracle is out to make money and will follow it wherever it takes them. MySQL will continue to grow and beat Oracle by its own merits. This takeover is nothing but a glittery sideshow – nothing to worry about for open source.

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    1. If you believe spare time hackers can provide the same level of support as MySQL:s 300+ hired staff can do, you are insane. Oracle now owns the MySQL code base, and they pretty much decides who will do what with it. Other players may fork the source code, but since Oracle holds most of the intellectual proeprty of it, it is damned hard to earn an income based on it. It would have been a completely different story if MySQL was distributed under the BSD license, for example.

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      1. You are completely wrong. Oracle owns the MySQL logos and other identifying stuff like that. They also own the MySql web site. That is about all that they own. MySql has all ready been forked at least a couple of times.

        After the sleazy way Oracle started reselling their version of RedHat with very little give back, my guess is Oracle will not be making any friends in the open source world with this acquisition.

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    2. Charu Kanzehr Tuesday, April 21, 2009

      Its not easy to fork a database like MySQL. Since database software development is one of the costliest software development beyond a certain point which MySQL has already crossed. Maintaining the pace of MySQL development as a public domain available under GPL is now beyond the capacity of free software community. Ultimately Oracle will make it a kitten database and position it like an entry point for Oracle Database. MySQL will be used as a pawn to sell Oracle Database-the Queen of the databases.

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    3. No doubt MySQL will continue to grow but it will first need to “start” beating Oracle before “continuing” to beat it on it’s own merits. And that won’t happen for at least 5-10 years out – if ever.

      I’m a database professional who dives into some of the worlds most complex database environments constantly and I see plenty of the periphery. I pretty much never see MySQL in anything mission critical and where it comes closest it acts as a read-only repository loaded by hodgepodge batch solutions from the OLTP databases produced by top 3 well known DB vendors.

      As it stands, Oracle’s the defacto standard, DB2 continues it’s downward slide and SQL Server continues to consistently scale better. And Teradata seems to keep popping up in the warehouses. So we’ve got a Coke, Pepsi, Mountain Dew and Dr. Pepper. MySQL can only hope to be a Fanta unless something big happens to it to help it along. And that something big could very well be this Oracle acquisition.

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  10. I hope Oracle handles MySQL diligently and does not change the free offerings.

    Oracle might rebrand MySQL as OraSQL .. lol

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  11. I am scared. Will they dump MySQL. Better to get rid of MySQL specific sql from code. It is time to get ready to jump to Postgres or other databse. Better to be safe than sorry.

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  12. Hopefully the Oracle slimdown and trimdown machinery does their job with precision. Sun’s crown jewels of Java, MySQL and Solaris can be polished and become a potent threat to Big Blue, HP, Micrsoft, et al. A good move for Mr. Ellison indeed. http://tinyurl.com/cte6ez

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  13. Will Hayworth Monday, April 20, 2009

    Om, I’m curious how you think this will affect (Open)Solaris…I can see it as being a potential asset to Oracle, but I have to wonder if Oracle will consider the open-source part of the project to be unproductive or (worse) counterproductive and accordingly castrate or cancel it.

    With MySQL, there are all sorts of alternatives (PostgreSQL, anyone?), but OpenSolaris does a lot of unique stuff…it would be a real shame to see it no longer exist as a corporate-sponsored project.

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  14. Om,
    you’re really the first press coverage i’ve seen to cover the mySQL angle, and i’m surprised by that frankly. I think for most of us in the startup world, this has the potential to be a major negative. Oracle obviously makes a lot of money on databases from its large enterprise customers, but hardly any startups I’m aware of actually purchase database software – they use free versions of mysql of course. A few years down the road, it’s not clear that there will be a viable free/open-source mySQL like there is today with a vibrant ecosystem of tools and development resources. I wouldn’t be surprised if Oracle comes out with some sort of “upgrade” path even for startups and tries to increase its penetration in the SME market (this would follow the course that enterprise/ERP applications have taken over the last few years).

    Rajeev Goel

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    1. Slashdot (unsurprisingly) has a lot of discussion about MySQL in the comments of this story:
      http://developers.slashdot.org/article.pl?sid=09/04/20/128246

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  15. OM
    So what are your prediction about consolidation hereon?

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    1. what does OM stand for wow

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  16. Om,
    This is a disaster for ORACLE. I would dump my shares.
    I remember some bright guy named Malik who wrote a book called broadbandits.
    Long story short from the book, Lucent went on a shopping binge and acquired a million companies.
    Didn’t know how to integrate them.
    The story looks similar, except that the sector has got changed.

    I cannot imagine how they are going come up with one product that fits Oracle Financials, Peoplesoft and SIEBEL in one integrated form.
    Their lucrative consulting revenue gone down.
    Added to this mess is the new SUN STROKE.

    They were battling with Microsoft and SAP, now add IBM to the mix ( I would say add HP too).

    Your thinking on CISCO was probably best that could have happened to both Cisco and Sun.
    Cisco knows how to do M&A. ORACLE is yet to prove on that.
    Since 2000, ORACLE stock is nearly flat , and it remains flat before being broken up into pieces.

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    1. Well, I think you apprehensions could be grossly misplaced. Experts would say that Oracle has already proved itself in the M&A domain, and this has been THE most important part for its growth strategy. In the last 4 years, it has bought nearly 50 companies, spending around $40 bn (including Sun). Although, many of these companies were small in size, they had focused and successful products. Then there were big acquisitions like PeopleSoft (along came JD Edw), Siebel, Heyperion, RETEK, BEA, I-flex, etc. The result? Oracle is already 3 times of what it used to be 4 years back, please wait for some more time, with Sun, it would grow even more.

      If the other companies (like Lucent, as mentioned by you) have failed, it does not mean Oracle would follow suit. I wonder if you really have their shares :), it has the buy tag for a long time and even as most of the rivals are running half of their prices, Oracle’s shares are not doing that bad.

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  17. Assuming the ranking from the link is still valid. Oracle market share in database market increased way beyond other competitors.
    http://www.mysql.com/why-mysql/marketshare/

    @Rajeev Goel: Creativity kicks when things get squeezed, I do believe there will be other viable open source databases. and there is.

    @gbp: They might use mysql to push their products into SMB markets, as many said.

    Very interesting. the game keeps changing :)
    Looking forward for updates

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  18. It absolutely doesn’t make sense that Oracle bought SUN for Solaris and MySQL. Both are Open source projects, which Oracle could have taken advantage of without the buyout. Mind you, that both projects will also continue to survive even if Oracle dumps them given the large users and developer community that are available for these packages.

    I think the real benefit is in the server business, IP Portfolio, SUN Grid and talent in SUN. It will be just a matter of time before you see custom built solutions from the ground up that are optimized for oracle products and service, or the Oracle cloud computing services based on grid technology.

    This merger will create another strong competitor for the hardware, services, and cloud computing market. I suspect IBM, HP, or Cisco could make a move to stop this merger by buying sun for a higher price.

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  19. Subhash Bose Monday, April 20, 2009

    Oracle has put out a FAQ here about the merger :
    http://www.oracle.com/sun/sun-faq.pdf

    This is what it says about MySQL:

    “MySQL will be an addition to Oracle’s existing suite of database products, which already includes Oracle Database 11g, TimesTen, Berkeley DB open source database, and the open source transactional storage engine, InnoDB.”

    And here is Oracle’s ambition:

    “Oracle plans to engineer a complete, integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves.”

    Well at least Oracle dont have to pay IBM for using JAVA.

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  20. This is the deal of the century and the very best scenario that ever could have happened. Oracle needs Sun to add that high value, fresh intellectual capital and integrated services. they can now deliver a complete application suite as a System Integrator, and the MySql folks have nothing to worry about.

    The best of both worlds will emerge. The biggest problem Oracle had (past tense) was out the door licensing that proved a barrier to mid tier business. The worst problem MySQl had was easy entry for simple apparitions that scaled to a certain point and then became unwieldy. Now, Oracle can fix that glaring problem, and migrate down the vertical stack for complete turnkey industry solutions that are more affordable. This was all talk before, and they were hampered, but now they can really deliver where an embedded simple DB is a better fit, MySql improved with some sauces, or high end Fusion app servers packaged on scalable hardware.

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  21. Om et al,

    I think the MySQL angle is very intriguing, but there are some key facts to consider:

    1. MySQL has a dual-licensing revenue model. They provide MySQL under both the GPL and licenses that enable MySQL to be integrated with non-GPL and proprietary software packages. In order to do this, MySQL is different than Linux in that he company owns ALL the code. My understanding is that MySQL doesn’t accept changes without getting that code signed over to the company directly. One big question is whether Oracle continues the dual license business model given that it will have to either develop internally or buy new code from the external development community.

    2. Given that current iteration of MySQL is GPL, Oracle cannot kill it. Even if they were to stop promoting it or putting development resources into it, it can and will live on as a competitor to Oracle’s database.

    3. Finally, and most importantly, the MySQL exodus began months ago. CEO Marten Mickos left in a huff over the product’s direction months ago, and several other key MySQL personnel have also departed and are talking about (if they haven’t already) started supporting an official fork in the code.

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    1. thank you mark… I want more insightful info like this… i want to know where the open source db market will head…

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  22. Craig Goodrich Monday, April 20, 2009

    If Oracle abandons MySQL — which I don’t think they necessarily will — then remember that the original MySQL team is out there, eager to support and enhance a product with a huge installed base. As a cultural thing, most MySQL users are much more sympathetic to this sort of model than to the huge enterprise image Oracle cultivates — which in turn is more comforting to other huge enterprises.

    If Oracle really wants to make inroads into MySQL, they’ll have to come up with less confiscatory licensing prices. Period. Buying MySQL won’t do any more for Oracle’s competitiveness than buying UNIX did for Novell’s.

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  23. chetan conikee Monday, April 20, 2009

    Om

    I am waiting to hear from Brain Aker who is currently sphere heading the Drizzle DB initiative and also happens to be one of the mysql’s early founders.

    Larry’s shadow over such enterprising folks is totally damaging.
    Chetan

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  24. my SQL – three things can happens

    1. Oracle publicly kills it – then expect a fork to get some real VC money.(most unlikely scenario)

    2. Oracle wants to kill the whole concept internally but tells the world that mySQL is going to continue.
    Still expect a fork to get some action. but slow movement. (most likely scenario)

    3. Oracle embraces the mySQL model completely. (Licensing , approach etc). not likely to happen.

    Probably the answer is going to be: Use the Cloud to get the free stuff bubdled. elsewhere you are on your on

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    1. Very interesting perspectives.

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  25. Subhash Bose Monday, April 20, 2009

    The bigger question is – in the long run is there anything non oracle that can run on orasun servers? Or Sun hardware will simply collapse into different oracle appliances running different components of oracle stack?

    Well with Solaris 10 resource managed containers and ZFS technology it is indeed meant to be much more than an appliance. Will Oracle have the guts to keep that alive?

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  26. Subhash Bose Monday, April 20, 2009

    The more I think the more I am sure – it is not that if MySQL will survive or not – it will because it is open source.

    What will probably not survive is the SPARC line of processor – stuff which powers sun’s hardware. I dont think Oracle will be interested in building its orasun appliances on SPARC processor.

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  27. I see Oracle defining its entry in 2 key software trends through the Sun acquisition: OpenSource and Cloud Computing / SaaS: http://www.sramanamitra.com/2009/04/20/oracle-acquires-sun-opensource-first-saas-next/

    Java, yes; hardware, may be; but what this really positions Oracle for is vastly enhancing its Cloud Computing story, including apps. I expect a set of SaaS acquisitions soon.

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  28. “Oracle’s products find no room in most of the new web companies”

    Dude, put down the bong and step away slowly. I only know one startup that does real data work that does not use Oracle. And they use SQL*Server.

    If Oracle ports their instance management and data manipulation tools to MySQL then they might finally have a laptop sized offering, and a good upgrade path for when your startup moves off an old PC under your desk and onto a server.

    This does not apply to Twitter, obviously.

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  29. Knowing Oracle has steered and executed and delivered on their business very well over years I am happy that they bought Sun and if they can make a business plan around Sun’s asset and IP well it will be a great use of resources. Sun failed very badly on making sense on business front even though they came up with Java. There are ”other’ companies who had more business senses than Sun to use it for business instead of fighting it out with MS and gave it away to other companies. A group of great talent may come up with great solutions but one need the business sense to do business with it. I have all the confidence that Oracle would make a better business sense out of the assets at Sun.

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  30. I see this as a death of MySQL. Oracle tried to kill MySQL on numerous occasions. The contract MySQL has with Oracle regarding InnoDB is that MySQL cannot patch it, cannot fork it .. Oracle was intentionally delaying the InnoDB patches making MySQL clients suffer great deal directly affecting MySQL as a company. The moment MySQL implemented plugins, Oracle stopped development on compiled in InnoDB and they developed plugin for InnoDB again – the impact on MySQL business….

    Now, they managed to get a hold of MySQL… yes, the source is out there but…. 90% of the ppl from MySQL team will leave in next 10 days, already 50% of them left when SUN acquired MySQL… that’s gonna kill the MySQL as a product on it’s own, Oracle will keep the rest of the ppl, make the lousy policies, chase away the customers, make lousy product until they just ruin the MySQL to the point noone is using it….

    Thank you MySQL for allowing WEB to develop, to speed up the development of web apps and for showing the world FOSS project can be monetised; You will be missed!

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  31. Jim Callahan Monday, April 20, 2009

    SAP?
    It seems to me the odd man out in the Oracle acquistion of Sun Germany’s ERP vendor SAP.

    SAP accounting software uses Java (Netweaver) and SAP needs a database;
    however “At SAP® TechEd ’07 event in Las Vegas, MySQL AB and SAP AG announced that sales and support of the MaxDB database will revert back to SAP.”

    Still SAP and Oracle are competitors in the accounting software market. SAP’s accounting systems compete with Oracle’s Peoplesoft and JD Edwards brands; especially when SAP ventures out of the Fortune 1000 market and competes for the accounting software business of small and medium businesses.

    Oracle and SAP are also competitors in the Customer Relationship Management (CRM) space.

    Jim Callahan
    Orlando, FL

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  32. If I’m the DOJ I’m looking at this deal with a watchful eye, but it really wouldn’t make that much sense to kill off MySQL. Oracle and MySQL service for a large part two different markets. Could you see Oracle running individual web blogs? Or MySQL running airplane scheduling databases? Still, who ever said big business thought long term as opposed to short term greed.

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  33. While I see the logic for buying Sun for its software, I don’t know how much of the hardware business they would want to hold on to. There must be a good chunk of business they can carve out and sell to some other company (say Cisco). It will be interesting to see how this pans out.

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  34. how does it matter now ? Most of sun products are open sourced (java , netbeans , solaris , mysql etc , glassfish ) thank god !! …………frankly speaking I never liked anything that came out of sun ……specially in Java world ………..EJB , Netbeans etc ……..while open source community provides most stuff that is in real use …….apache jarkarta , eclipse etc ………who cares the crap about sun …………..i just hope java jdk development is taken care by some non profit organization apache harmony project …………….Bye Bye Sun ……..you over engineered piece of crap

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  35. @John M
    “MySQL running airplane scheduling databases” <— I guess someone at oracle could see that…

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  36. this makes (market) sense. beyond technologies that will either flourish (java, virtualization/solaris) or wither (mySQL, Sparc SMCC) the deal means change for thousands of sun and some oracle employees. lives will change, livelihoods will be lost. ORCL can now reasonably claim to be a contender in cloudwars. mr. ellison may surprise everyone by taking on cisco rather than selling server part of SUN to them. whenever large markets are perturbed, there are opportunities for nimble movers. cisco may have thrown out the first strike in to the server game, oracle can compete if the market changes enough to permit them to compete w/ a complete product offering that goes from servers to App (db).

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  37. Christian Gross Monday, April 20, 2009

    Wow, web folks are MISSING THE POINT…

    Let’s go back in history shall we… Who was the quintessential .COM company? Who was behind most startups? Sun! Yes Sun was the company that startups went to when they needed hardware. Then the bubble burst and Sun went down with it.

    Sun never made it back! Open Source, and web startups are a distraction! They earn nothing, have no business model for companies like Oracle and hence are a distraction…

    If you say, “oh oh look at Twitter… ” Yes please let’s look at Twitter. No business model, no earnings, no income, just the model that Ellison wants to avoid.

    I am actually very tempted to buy stock in Oracle because Ellison has his head screwed on right.

    The reference to Apollo is actually incorrect since Ellison is not buying companies willy nilly. Ellison is buying companies that fit to his enterprise vision. Anything else is not important, and that is focus.

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    1. Habib Ullah Khan Monday, April 20, 2009

      I agree with you. We once had a finance course in new ways of looking at earnings. I was astonished to note the financial discipline of Oracle and their maniacal focus on financial metrics. Their key indicators like return on working capital consistently went up.

      Anything that does not make money will not get funded. He will have his bets but within a shrewd niche.

      Behind the eccentricity and the acquisition overload people miss the fact that Oracle runs an incredibly tight ship financially and executes remarkably well under all conditions.

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  38. “Oracle obviously makes a lot of money on databases from its large enterprise customers, but hardly any startups I’m aware of actually purchase database software – they use free versions of mysql of course.”

    Well, Rotohog.com uses Oracle. But, you’re right. They didn’t pay for it. They better hope Oracle doesn’t find out.

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  39. Habib Ullah Khan Monday, April 20, 2009

    The consolidation is not over yet. Cisco HP and IBM have enough cash to jostle for a better positioning. I find two things interesting:

    1. Even though acquisitions are easier in tough times will the regulators not force a MySQL sale?
    2. Sun culture and Oracle culture? Hoo boy!

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  40. Layoffs will happen for sure but I love how Oracle make these smart moves and eat up competition. Whats next for them, a social media platform?

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  41. Andrew Henderson Monday, April 20, 2009

    Oracle Corp will do just little enough development of MySQL that a fairly substantial fork will materialise. But enough that Oracle Corp’s MySQL has just about sufficient strength to counter the fork in the fork’s own markets.
    Customers will be dismayed at the lack of coherence and OracleDb will yet again be seen as the paragon of confidence. This strategy will work for Oracle Corp.

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  42. Hei Om,

    This post’s alignment is not perfect. Justify it..

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  43. Om thank you! This is the type of details and coverage I was looking for.

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  44. Oracle will probably sell parts of the business like StorageTek to private equity and look to merge others like SPARC. It will slowly kill the app server that overlaps with BEA/other Oracle middleware and blend Seebeyond’s customers into their existing stack. In short, this is a brilliant acquisition that may pay for itself after dispositions and it really pokes IBM in the eye. IBM should have done this deal to keep it off the block.

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  45. Hello Om,

    I remember reading your post on why Cisco is a better fit than IBM. I thought that would be a distraction for what Cisco is good in doing. My pick was Oracle!

    I am wondering if Oracle declared reasons for the acquisition are the real ones. Normally in War the declared reasons while they might be true, they are not the core motivating force for engagement.

    True MySQL, Java, Solaris are vital pieces for the deal, but Sun’s Identity Management Suite is among the best 3 in the market. Sun not too long acquired Vaau The Role Engineering and Certification engine of its current IdM. Sun made also significant grounds in the alignment of its IdM offering on top of a solid repository stack the Sun Directory Enterprise Server on Solaris. Oracle snapped many companies in the IdM space has a solid lineup. IBM needed Sun because it lacked some key pieces in the IdM space primary among them the Role engineering capability and I personally believe that IBM needed the R&D power in Sun since IBM while it is a big player it is not the innovation powerhouse it once was.

    I wonder what Oracle would do to Sun’s Identity Management?

    Another aspect that Sun has worked hard on is in the SOA domain under a project codenamed Metro. This is a significant platform that will work with Java and .NET services as equal first class citizens with no interop blumping that used to cause integration complexity to grow exponentially.

    I have no doubt that Oracle would digest Sun, but it will be how Oracle normally digest its acquisitions, Not pretty!

    Last but not the least, This could be a sad day for the open source world and what it brings of fresh innovative ideas and compelling shifts in attitudes.

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  46. Startups use free MySQL because startups don’t make any money.

    When you want to do a light project, you go down to U-Haul (MySQL) and rent a truck to get the job done.

    When you want to do some heavy lifting, you call out the Department of Transportation. (Oracle).

    MySQL and Oracle should ideally complement each other, not compete.

    Oracle serves the high end and MySQL serves the low end. There’s no way I’d ever put an ERP system on MySQL, never.

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    1. No matter Oracle want it or not, MySQL will find the way out because the demand of an open, loyalty free, proven scalable, and light weight database for web is everywhere.

      Oracle better to be friendly to MySQL community. The best they can do is to make all Oracle’s software compatible or pre-integrated with MySQL. That increases the chance of MySQL user to migrate to Oracle when commercial support required.

      I think forks will happen. hope some tech giant such as Google can lead the fork.

      Anyway, MySQL is already open-sourced and no way to return proprietary. So don’t worry about its future. The only killer to MySQL is itself.

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    2. Why would you not put it on MySQL?

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  47. Subhash Bose Monday, April 20, 2009

    WHAT HAPPENS TO SPARC ARCHITECTURE?????

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  48. Thanks for the updated post. Oracle got many DB and MySQL adds to it. You should visit MySQL UC tomorrow.
    BTW, your analysis have lot of flaws – ORCL can’t be IBM on services grounds. You though weave nice stories
    from multiple places and attract gossip mongers for various “What if scenarios”. So I admire you if not
    trust your analysis.

    This is a classic White Knight move in the M&A game. Nothing new here or surprising.
    IBM set the price for Sun. Oracle paid it. Consolidation is happening and you can
    collect more mongers for next few quarters.

    Cheers,
    DG

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  49. I think Oracle will have a dilemma over MySQL. My own sense that it may wither and die to protect the Oracle 11g margins. This has been analyzed in my blog post at: http://subbaiyer.wordpress.com/2009/04/20/oracle-acquires-sun-unexpected-and-interesting/

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  50. methinks Larry will next swallow Amazon if there will be problems with digesting Sun’s cloud

    ERP market is already well trimmed by Oracle purchases, so if cloud computing is next, Amazon is next. Google acquires small agressive startups to fill in the holes in its portfolio, but Oracle seems to buy biggest competitors first.

    Continuing this logic without fear to get ridiculously absurd, we’ll see that with Sun merger, Oracle gets SPARC+Solaris, and might think that Oracle is entering an OS market, so Apple is to be a next one swallowed.

    Nah, people, relax and enjoy the show “Darwin theory in application to IT”. Let’s just hope that none will get his Darwin prize as a result.

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  51. When the world is turning to cloud computing (AWS with S3 and EC2), why buy a server company (“the network is the computer”) as a software/data base company?

    Oracle has the policy of making you pay for any software.
    SUN had the policy of giving away free a lot of software.

    Is java still so powerful seen the ever increasing number of Ruby on Rails applications (37 Signals, Twitter, …)

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  52. Avi Rosenthal Tuesday, April 21, 2009

    Vendors Survival: The Sun is Red – Oracle to buy Sun – First Take

    http://avirosenthal.blogspot.com/2009/04/vendors-survival-sun-is-red-oracle-to.html

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  53. This is definitely a game changing move by Oracle. It basically puts them in the ring with all the major players!

    Java – IBM – I suspect they will both support java and milk consultancy from their products built on it

    MySQL – Oracle will milk consultancy on this one, and offer OracleDB to the bigger players. Nice way to get new customers as they grow

    OpenOffice – This puts them in direct competition with Microsoft.Every install of openoffice is one less install on Microsoft Office
    Servers – IBM and HP
    Solaris – Solaris bundled with OracleDB and a support package. Sybase must be wetting themselves already!

    The only areas I see them selling off is the server division if they could get a good price for it.

    I see Oracle making mucho mucho money from this deal, especially in the consultancy arena, where HP and IBM rule at the mo

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  54. Not sure where you got your statement about the Sun acquisition: “but the fact is that despite most of the MySQL team having quit…”. As the manager of the MySQL Engineering team, I can tell you that we have had less than 2% attrition in the year since Sun acquired MySQL, and our veteran engineers are still here at Sun continuing to release MySQL Server and associated products.

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    1. Could you please give us your take on the possible impact to MySQL and OpenOffice as I note with interest you are likely the only qualified participant in this forum ?
      Any “clues” would be received with the greatest of interest.

      Thanks.

      Share
  55. Our first reaction – What will not happen to the open source phenomenon?

    Opensource are the true friends of a new high tech company with minimal money. It helps and lets the world know that if you can design, architect and produce a solution which solves real problem, people will buy from you. Now what??? [more >> http://tech-at-teleox.blogspot.com/2009/04/is-sun-going-to-set-in-west-now.html%5D

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  56. Oracle is going to support MySQL. There are 2 key drivers.

    1) they own the database engine that MySQL uses & see the core install base of MySQL of millions of databases as a core customer base to be harvested as 10% of those will need a Oracle DB sometime in the future.

    2) MySQL gives Oracle a real MS Access like database & entry level SQL Server “like” that Oracle standard edition has never become in 15 years of pushing Oracle Personal edition to basic Oracle database

    I think the open source model is going to change as Oracle buys open source tool vendors and creates its own enterprise stack & open source stack. This is key in attacking the Microsoft space. Oracle goes after Microsoft with OpenSource & IBM with its Oracle Enterprise Stack. It will take 5-10 more mergers for them to pull this off but it makes sense.

    The key is OpenSource system management is weak as a stack play and Oracle can sell OEM & their future system mgmt. stack as a way to manage OpenSource. It gives them a way to sell 10-50k licenses of OEM for OpenSource over the next 5 years to Opensource buyers.

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  57. really, now on site mysql logo have 2 part mysql and sun

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  58. software compnay is becoming a hardware company ( add operational cost )

    Can oracle feed Sun ?

    Oracle shareholders will decide

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  59. a bigbang gonna happen in IT…..
    i can see brightest future of JAVA…..

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