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Summary:

Just a few hours after Oracle’s $7.4 billion acquisition of Sun Microsystems was approved, Sun CEO Jonathan Schwartz sent out an internal memo to employees discussing the impact the change in control would have. Go Oracle! he told Sun employees. There’s more to the story, though.

As we reported this morning, after a waiting period that drew strong criticism for its obstruction of the deal, the European Commission approved Oracle’s $7.4 billion acquisition of Sun Microsystems. It only took a few hours for an internal memo to go out from Jonathan Schwartz, Sun’s CEO, announcing that he is resigning. discussing the impact that change in control will have on Sun, including the exit of some employees. Go Oracle! he told Sun employees. There’s more to the story, though.

In his memo, Schwartz, a very highly regarded person in the open source community, who once had a widely followed blog that he eventually posted to less and less, noted the fact that Europe’s approval of the Oracle acquisition took nine months — a long time. Schwartz has, partly because of the rules surrounding proposed acquisitions, been very silent during that time. In today’s internal memo, he refers to the impact that “change in control” has upon any acquisition and describes how broadly it will affect all Sun employees:

“I’ve also led, and been a part of many, many acquisitions at Sun, both large and small. From those experiences, I’ve learned one very clear lesson–the single most important driver of a successful acquisition are the people involved–and how committed they are to the new owner’s mission. And the most effective mechanism I’ve seen for driving that commitment begins with a simple, but emotionally difficult step. Upon change in control, every employee needs to emotionally resign from Sun.”

Schwartz goes on to acknowledge that “some” employees will have places at Oracle, but clearly he doesn’t see himself as having one. what about his own future there? While Schwartz goes to lengths in the memo to express support for Larry Ellison, the fact is that Ellison is well-known as a difficult person to work with. Most of all, though, the quoted text above points to a disheartened person — a person whose heart is not in what he might be asked to do under Oracle.

During his tenure as CEO of Sun, Schwartz was best known as the pony-tailed lover of all things open source, quixotically dressed on stage in pinstripe suits. I’m betting he has serious doubts about Oracle’s intent to advance Sun’s open source efforts.

For example, why should Oracle drive the MySQL database division forward — after it had grown nicely — when it’s competition for Oracle’s own expensive, proprietary databases? Even Monty Widenius, co-founder of MySQL, has been asking that question. Many people in the open source community see Oracle’s acquisition of MySQL, and the long waiting period that Europe required to approve the deal (while many MySQL customers bailed) as sealing MySQL’s doom.

For that matter, why should Oracle care about overseeing the OpenOffice suite of open-source productivity applications? That’s just competing with Microsoft in a game that doesn’t go far. And we don’t even have to get into GlassFish and the countless other open-source software efforts at Sun that Oracle has little financial interest in supporting.

Schwartz’s decision to leave probably has a lot do with open source efforts that he cares about that are unlikely to flourish, and a lot do with money. admonition to employees to “emotionally resign from Sun” is a signal that the upcoming change in control at the company will run deep, and probably affect the company’s many open source efforts. That includes There is money that Oracle can save by extinguishing projects such as MySQL, or letting them languish. It may include There may be money that Oracle can reap through staff cuts and possibly cutting Sun’s hardware business. Schwartz’s decision Any future decision Schwartz makes regarding staying may also have to do with substantial money he’ll get as a result of his equity in Sun in any exit.

Sun’s positioning as an open source leader started to become sketchier last April when Oracle proposed the company’s acquisition. Today, we’re seeing the endgame of that pursuit from a huge player in proprietary software, and the beginning of the financial fallout to come. Money changes everything.

Image courtesy of TechShowNetworks on Flickr.

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  1. Jonathan was the guy, I had hoped, who would prove the open source business model.

    Guess what! he failed and also my views on open source changed. There is not such thing as free lunch. someone had to pay- in this case shareholders like me paid the price.

  2. Sebastian Rupley Thursday, January 21, 2010

    @Niraj, I think we’re right on the cusp of seeing many companies come up with sustainable business models surrounding open source. Red Hat, for example, has flourished during the recession. But Sun experimented and stumbled, and ultimately had to offer shareholders a buyout opportunity when one was offered.

    Sebastian

  3. Hopefully at the “Oracle + Sun Strategy Update” (Jan 27th) we will know a bit more on what Oracle will keep or throw away.

    I am a bit concerned for products like OpenOffice and netbeans… will see.

  4. I think he proved the open source software business model. What he couldn’t prove was that SPARC wasn’t dead. SPARC evaporating (along with the banks that ran it) was what sunk them, not their software business (which was worth more than Sun itself).

    btw, anyone else read his internal memo? Look at the first letter of each of the first seven paragraphs…

    1. @Bart, Excellent thinking, about the first letter of the first seven paragraphs…

    2. So what are the First Letters?

      On the OSS business model discussion. There is still ambiguity as to why people do open source. On one hand people would like to treat OSS as public property and on the other it is just-another-commercial play with a different redemption approach.

      Refer thoughts here

      http://www.thedelphicfuture.org/2010/01/save-mysql.html?showComment=1263755406163#c8141557860906663466

  5. Links 22/1/2010: London Stock Exchange on Road to GNU/Linux, Btrfs vs EXT4 on Linux 2.6.33 | Boycott Novell Friday, January 22, 2010

    [...] UPDATED: Sun CEO Issues Memo in Wake of Oracle Acquisition Greenlight During his tenure as CEO of Sun, Schwartz was best known as the pony-tailed lover of all things open source, quixotically dressed on stage in pinstripe suits. I’m betting he has serious doubts about Oracle’s intent to advance Sun’s open source efforts. [...]

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