How could an open source software project that we hear generates a modest 17m euros a year in Europe have held up a $7.4bn tech industry mega-merger ?
Unlikely as it sounds, Brussels has put the Oracle/Sun deal on hold while it takes a longer look at the fate of tiny MySQL, which Gartner reckons has a database market share of around half a percentage point.
Clearly, somewhere along the line Oracle has played its cards very badly.
For whatever reason, it filed its official notification of the merger in Europe just as Brussels was closing down for the summer. Armed with clearance from the Department of Justice, it seems to have felt confident enough to press ahead to get the deal cleared and finalised before Labour Day. If so, that strategy has backfired.
The question now: how substantive could Europe’s concerns over the database software market be?
It’s true that MySQL’s current revenues understate its wider impact, given its business model (free download, pay for service). Also, they don’t help in understanding its potential to become a more important disruptive force in future.
That might suggest that Oracle would have a strong incentive to kill it in its crib. But if so, why has Microsoft been agitating to prevent Oracle from getting its hands on MySQL? After all, you’d think Redmond would be only too happy to see Oracle put down a potential competitor.
This exposes the wider issues at stake in the Sun deal. Microsoft’s interest is in doing all it can to delay or block Oracle from extending its influence over infrastructure software through the control of Java. If the fate of MySQL is the aspect of the deal that resonates most in Brussels, so be it (Java was the reason the DoJ gave for dragging its feet in giving its own approval of the deal, but as we reported last month, this wasn’t an issue that European rival SAP seemed too exercised about).
In reality, it would be hard for Oracle to kill MySQL. It doesn’t control the IP, since the software is available under the GPL. Anyone else could clone it and continue their own version – as, indeed, founder Monty Widenius put it when the deal was announced:
I don’t think that anyone can own an open source project; the projects are defined by the de-facto project leaders and the developers that are working on the project. If the company loses the trust of these people, they can go away and fork the project and turn it the way they want to.
True, Oracle would own the MySQL name. Also, the momentum behind the project would be weakened if the core group of developers were to disband and, as Widenius put it, “spread like the wind”.
But with some big Web companies, including Facebook, built on top of the software, it’s hard to believe that MySQL would just fade away.
That said, Oracle now faces an invidious choice. It can press its case in the face of Europe’s publicly voiced doubts, but that might only serve to extend the second-phase review into early next year. Even if it eventually prevailed, it would have lost months, Sun’s business would only have been further weakened by the uncertainty.
Or it can try to resolve things faster by proposing some sort of remedy to deal with Brussels’ concerns. There’s no assurance even then, though, that it would get a speedy resolution.
Second-stage investigations from Brussels often end without the Commission filing a statement of objections. But this is certainly not the position Oracle wanted to be in right now.
