When Oracle announced its $7.4 billion acquisition of Sun Microsystems in April, the software behemoth was acting on a grand vision. The deal was part of Oracle's aim to become a soup-to-nuts supplier of everything companies need to run their computer systems, from chips and operating systems to databases and business programs. The grand plan may need some revision.
In order to alleviate pressure from European Union regulators worried about Oracle's (ORCL) growing power, Oracle may be forced to give up some control of a key aspect of the deal: the open-source MySQL database software owned by Sun.
The EU on Nov. 9 formally objected to Oracle’s acquisition of Sun. A Sun regulatory filing said the EU believes Oracle’s ownership of MySQL would have “potential negative effects on competition” in the $19 billion-a-year database market. SUnN (JAVA) makes computer systems and software including the Java programming language and MySQL database, a kind of electronic filing system.
"Taking a Tough Stance"
MySQL, available free of charge, runs the Web sites of some of the Internet's biggest brands. Among them: Twitter, Facebook, Google (GOOG), and Yahoo (YHOO). "They're taking a tough stance because 10 years down the road this could be a pretty big competitor to Oracle," says a securities analyst who asked not to be named because he was expressing personal views on the deal.
After saying in September that it's looking into aspects of the deal, Europe's more formal objection to Oracle's acquisition of Sun sets the stage for negotiations on how to make the deal pass muster. Regulators may ask Oracle to release a new version of MySQL that it doesn't control to preserve competition. Sun bought MySQL for $1 billion in 2008.
Oracle declined to comment for this article, but issued a statement Nov. 9 that said the EU’s objection "reveals of profound misunderstanding of both database competition and open-source dynamics…Because MySQL is open source, it cannot be controlled by anyone," Oracle said.
MySQL is distributed under an open-source licensing agreement, which lets users freely modify its code, companies including Google, Amazon.com (AMZN), and a software development project called Drizzle that's staffed partly with Sun employees, have already modified the database or incorporated it into commercial products without buying an officially supported version from Sun. For example, Amazon.com on Oct. 27 announced that customers can rent the MySQL database from Amazon over the Internet, paying by how much data they store and transfer. Google maintains its own version of MySQL, too.
The EU Is Positioning Itself
The presence of these versions in the wild suggests that forcing Oracle to spin out yet another version of the software may be redundant. "The remedy's already there," says one industry executive familiar with the EU's thinking, who says a regulated new version of the software would have little impact on the way companies license and use MySQL, which is prized for its speed and adaptability to running large Web sites. "The vast majority of the installed base isn't controlled by the vendor…I'm at a loss why any other remedies would be needed," this person says. "There's something illogical in the whole thing."
Whatever the proposed concessions, even Oracle's competitors believe the Sun deal will get done. "They're doing what the EU always does—making provocative statements," says an executive at an Oracle competitor. Analysts say the EU wants to position itself as an advocate for technologies that are more open rather than proprietary—closely guarded by license owners.
Source:
http://www.businessweek.com/technology/content/nov2009/tc2009118_559520.htm
Chicago Web Site Design Company
No comments:
Post a Comment