Red Hat

Pressure builds for Oracle to sell MySQL

It seems like some people just don’t want Oracle to own MySQL.

Right on the heels of Oracle chairman Larry Ellison’s pledge to aggressively support Sun’s MySQL database at OpenWorld last week, Michael “Monty” Widenius, MySQL’s creator says Oracle should sell the open source database to a third party thereby resolving the antitrust concerns of the European Union (EU).

The EU’s objections are focused on Oracle, the leader in proprietary databases, gaining possession of MySQL, the leading open source database, and the competitive ramifications that sort of dominance will have on European markets.

In his blog Widenius wrote that MySQL needs a different home other than Oracle “where there would be no conflicts of interest concerning how, or if, MySQL should be developed further.”

Both Ellison and Sun co-founder Scott McNealy in their OpenWorld keynotes pointed to examples of Oracle’s track record when it comes to owning open source products, most notably the Sleepycat database. McNealy said he believes Ellison will carry through on his promise to bring MySQL greater success adding that the product represents no threat to Oracle’s flagship database and that it is a natural competitor to and an offering from a common enemy - Microsoft.

“MySQL is the leading open source, low-end database. Larry says it will not compete with Oracle or DB2 but with Microsoft so he has every reason to want it to succeed,” McNealy said.

Even Widenius’ former partner and co-founder of MySQL, Marten Mickos has contacted Nellie Kroes, the EU’s Competition Commissioner, advising her to approve the acquisition in the face of Sun’s dwindling market share and financial fortunes.

Ellison last month said Sun is losing some $100 million a month, and if the EU’s investigation goes all the way to the January 19 deadline, that could mean another $300 million in losses, along with God knows how many more points of lost market share to IBM and HP in the server hardware business. As I have said before, I don’t understand why the EU doesn’t understand there is little danger to limiting user choice or in Oracle trying to control pricing by approving the deal. I mean, there are no pricing issues — MySQL is free.

Just late yesterday Sun said it planned to cut 3,000 jobs over the next year, although some of those jobs could be related to redundancies with Oracle personnel as the company readies itself for the expected merger. Still, some of those layoffs have to be related to Sun’s poor performance since early this year.

The rub here is finding a “suitable” third party to take over ownership of MySQL. It certainly can’t be sold to IBM, SAP, Hewlett-Packard or any other major competitor of either Oracle or Sun without the strong objections of Mr. Ellison and certain government agencies.

Microsoft? They should be interested in the idea, since Oracle could well use MySQL to compete against SQL Server in the lower end markets. They could take a weapon out of Larry’s hands. But I doubt they are ready for such an aggressive move into the open source world.

Leading open source companies Red Hat and Novell would give serious consideration to buying it, but will they ever get the chance? Highly unlikely, but it’s an outside possibility.

Widenius, by the way, left MySQL a while ago to form his own company, Monty Program AB which is working on a branch of MySQL called MariaDB. I assume he doesn’t have any interest in marshaling an effort to take his old product back.

No, (and I can barely believe I am saying this) the best option here for everyone concerned is that the EU show some faith and trust that Oracle will do what it says it will do. If Oracle doesn’t follow through and abuses its monopoly position in the database market, Oracle will be the biggest loser because customers and their dollars will migrate to a more trustworthy competitor.

Living in a three company world

Several years ago or so Oracle chairman and CEO Larry Ellison made a typically brash prediction that eventually there would only be two or three major IT vendors left standing. Of course he believes Oracle is going to be one of them.

It is the kind of prophecy most people discount as self serving, and that couldn’t possibly come to pass.

But with persistent rumors swirling around the last couple of weeks involving IBM, Hewlett-Packard and Oracle all interested in buying Sun Microsystems, as well as rumors circulating that Oracle again wants to gobble up Red Hat, the possibility of a three vendor IT world seems more possible.

The development with the most potential to create this three vendor world is not the one where IBM buys Sun, but the one involving Oracle and HP dividing up Sun. According to those rumors Oracle is willing to put up $2 billion to buy Sun’s software business, most notably its crown jewels, Java and the open source data base, MySQL. At $2 billion it would be the steal of this young century.

Rumorologists have yet to attach a figure to what HP is willing to plunk down to take over Sun’s server-based hardware business. It is safe to say it would cost HP $3 to $4 billion, and that too could be worth it to secure HP’s top position in the overall server market.

But its Oracle’s possible move on Sun and Red Hat, in tandem with its increasingly chummy relationship with HP the last few years, that is at the center of all this.

First, there is the prospect of Oracle taking over control of Java. It is unlikely that even Oracle would consider monkeying around and changing the technical working of Java to serve its own development needs and so put a major competitor such as IBM at a disadvantage.

But it could make life difficult for competitors, most notably IBM, by raising the fees on Java next time Big Blue’s Java licenses came up for renewal. It could put IBM server products at a price-performance disadvantage against those of Oracle.

If it grabs hold of MySQL, Oracle could significantly enhance its credibility in the open source world, as well as gaining a low-end data base that could effectively compete against Microsoft. As more IT shops strongly consider open source products in these recessionary times, the prospects for MySQL are looking better and better.

Some might suggest that acquiring MySQL would threaten the margins Oracle makes on its much higher end bread and butter Unix-based data bases. I don’t believe it will. With Linux-based operating systems and their applications taking on increasingly mission critical applications, along with the high-end Unix market slowly shrinking, Oracle can avoid MySQL canabilizing the lower end of its proprietary databases and make this work.

Couple MySQL with Red Hat’s Linux, particularly the Enterprise versions of that product, and Oracle gains direct control of half the LAMP stack (Linux, Apache, MySQL, and PHP) and suddenly Oracle becomes the strongest vendor in the open source world — certainly the richest.

Then there is the increasingly tighter relationship between Oracle and HP. Oracle and Sun once had a very close relationship. Back in the hay day of the dot com boom, the “miracle stack” was Oracle’s databases, Sun’s SPARC servers and operating systems, Cisco’s communications hardware and the Apache Web server.

But a few years ago Oracle and Sun drifted apart over issues involving Oracle dissatisfaction about the cost of Java licensing fees, and the competition imposed by Oracle’s Unbreakable Linux.

Stepping in to take Sun’s place has been HP, as evidenced by deals such as the one last year between the two that resulted in the Exadata appliance server. That product, which is the marriage of HP hardware and Oracle software, that allows 11g to run insanely fast. Oracle hasn’t shown that kind of tight cooperation with a major vendor since its dealings with, well, Sun. And given that HP can provide all the servers Oracle could need (especially if HP acquires Sun’s SPARC servers), along with storage products, and a large worldwide maintenance organization would make for a very formidable team. And oh yes, Red Hat already has a good working relationship with HP, which makes Red Hat Linux available on its servers.

Oracle’s continued control of the proprietary data base market, its strengthened position in the open source world, and a tight relationship with HP, would put every major competitor, possibly excluding IBM, at a major disadvantage.

Even mighty Microsoft would have difficulty keeping up. As the world gravitates more towards open source for higher end applications involving cloud computing and SOA initiatives and turns  towards a rich well positioned supplier like Oracle, Microsoft would have to go on the defensive. And with Oracle working more closely with HP to deliver higher-end margin rich solutions, Dell too could be commoditized down to a second tier player in the enterprise market.

Two other things lend further credence to this scenario materializing. One, Oracle has a proven track record of making large acquisitions work, and two Sun, despite IBM engaging it in talks first, prefers to sell to a west-coast based company, according to rumors.

Lord knows what Sun’s poor board of directors is thinking given the possibilities potential buyers have presented to them. But if Mr. Ellison can entice Sun, Red Hat and HP to go along, his outrageous prediction of just three IT companies left standing, namely Oracle, HP, and IBM, is not so outrageous.