After nearly a year of deliberation and widespread criticism, the European Commission has finally officially approved Oracle’s proposed acquisition of Sun Microsystems for $7.4 billion. Sun’s time in no-man’s-land saw it lose many customers and raised questions about key products and divisions that it has. The question now is, what has this cost the company?
“I am now satisfied that competition and innovation will be preserved on all the markets concerned. Oracle’s acquisition of Sun has the potential to revitalize important assets and create new and innovative products,” said Neelie Kroes, the European antitrust commissioner, in a statement. Kroes was key to the opposition of the proposed acquisition, and the fact that she is satisfied that “competition and innovation will be preserved” comes only a few months short of a year after the EC began deliberating over the deal in April of 2009.
During the long wait that Sun and its customers had to endure, one of the big questions everyone asked was what would come of the company’s MySQL open-source database and the division surrounding it, which had been growing. After the U.S. Department of Justice quickly approved the merger, speculation started to arise that Oracle might kill MySQL due to the competition it represents for Oracle’s proprietary databases. Oracle officials have repeatedly denied that, implying instead that MySQL can become an on-ramp for new users of its databases, but Monty Widenius, MySQL’s co-founder, kept up a long campaign to block the acquisition. There is still no doubt that the European Commission’s long deliberation over the Oracle deal has cost MySQL momentum.
There are questions lingering about other aspects of Sun’s business as well. Since the proposed deal was announced, it’s been unclear what Oracle might do with Sun’s hardware business and cloud computing initiatives. One analyst recently suggested that Oracle would slash half of Sun’s workforce, which would almost certainly involve big cuts in its hardware business. Sun officials have vehemently denied that, and have in fact campaigned for the acquisition to go through.
Sun Microsystems has been one of just three big public U.S. companies (the other two being Novell and Red Hat) almost entirely focused on open source, and one of the biggest blows to the company from its long time in limbo is the slowdown in momentum of its open source efforts, particularly with MySQL. IBM has been one of the big beneficiaries of the European Commission’s long decision-making process, as reports have come in that customers from Sun’s server business and other divisions have drifted to it. Some have even suggested that IBM may have played a role in the EC’s long decision-making process.
MySQL has been good for both competition and the rise of open source, so it will be interesting to see if Oracle’s pledge to preserve its momentum sticks. Sun’s open-source virtualization and open cloud computing initiatives have also represented healthy competition for the VMwares and IBMs of the world.
There again, it remains to be seen how valuable Oracle really thinks Sun’s underlying open-source assets are, and how committed it is to being in the hardware business. Even OpenOffice, the widely used open-source competitor to Microsoft Office, stands to be heavily influenced by Oracle’s oversight of it, as will Java, which is driven forward through open processes but will be heavily influnced by Oracle’s oversight of it. (Oracle’s Larry Ellison has referred to Java as its most important software acquisition ever.) As the EC finally delivers a decision, most of the open source community has strong criticism for the amount of time it took to reach one.
The real irony there is that the EC cited openness and open source in particular as what it was trying to protect in heavily scrutinizing the deal. That just does not compute.