Whip up your hate in some tottering state
But not here, dear
Is that clear, dear?
Waltz for Eva and Che
Evita, The Motion Picture
Last Monday, April 20, started out innocently enough, a trip to Silicon Valley for the annual MySQL conference. Little did we realize when we arrived in San Francisco that Oracle had preempted the conference by announcing its acquisition of Sun Microsytems. Sun, of course, had purchased commercial open source database vendor MySQL in a controversial $1B deal last year.
There was no shortage of strong reaction to the deal at the conference, even if the analyses were all over the strategic map. Open source purists were incensed, certain that imperialist Oracle would kill the MySQL initiative. MySQL management, caught off guard like most everyone else, opined at the opening address that MySQL was too big to kill -- certainly true, but hardly reassuring for the masses. And the MySQL ecosystem companies whose livelihoods revolve on MySQL were on edge to say the least, even as they tried to paint rosy futures for their businesses in the new landscape. Several had been involved with Oracle acquisitions in previous lives, for better or worse, and seemed resigned to their fate.
While MySQL conference attendees understandably focused on the fate of the open source database, the wider industry put more attention on server and storage hardware, Solaris, and Java components. Well articulated thinking posited the Oracle move as a strike against Microsoft or IBM, HP et. al. Different permutations of the proposed Oracle strategy emerged, some driven by hardware, some by Solaris and Java. One pundit proposed a 2-pronged Oracle strategy: Microsoft on the enterprise software front, with IBM and HP on servers and storage. MySQL was seen as an ancillary, not a primary decision driver.
The business press was likewise split in its assessments of the deal's meaning. The Wall Street Journal focused on Oracle's experience with acquisitions, cost cutting, and appliances tight integration of software and hardware. BusinessWeek offered a number of different perspectives. A first projected that Oracle would sell the Sun hardware business or, failing that, shed many of the lines. In that analysis, Java is king, providing Oracle with leverage over IBM and Microsoft. Even as free open source, MySQL would have strategic value for Oracle, allowing them to compete with Microsoft SQL Server at the low end. A second BusinessWeek article focused on Oracle's ability to better manage Sun's considerable assets as well as the strategic annuity value of Java over the entire technology landscape especially in relation to major competitors IBM and Microsoft. A contrarian third article warns that Oracle's foray into the hardware world is nothing but hubris, and that they'd be shackled with a lower margin business, ultimately forced to sell it off. The Economist offered perhaps the most comprehensive analysis of the transaction. Gaining control of Sun crown jewels Java and Solaris, Oracle will be able to build industry-focused, application to disk appliances, hiding complexity from customers much like Apple does for consumer products. The Economist also conjectures that the acquisition is a defensive move aimed at thwarting IBM, positioning Oracle for the inevitable consolidation that'll be dominated by a few integrated companies.
I'm not sure I'm prescient enough to offer much beyond what's been said already. It would certainly seem that Oracle is beefing up for larger technology wars down the road. And with a new server and storage business, the Solaris operating system, the ubiquitous Java development platform, the open source database MySQL, and even open office Oracle has purchased many pertinent components at a discount price. MySQL will live on: I can certainly see Oracle positioning the database as an appliance competitor on the low end to Microsoft SQL Server or not. After following Oracle for 25 years, I've learned to expect the unexpected and to ignore the inevitable Ellison bravado, understanding all the while that the company succeeds in most all its endeavors. I don't think I'd short Oracle just yet.
Steve Miller's blog can also be found at miller.openbi.com.