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InfoQ Homepage News Brussels approves $7.4bn Oracle-Sun deal, Oracle to Outline Strategy Next Week

Brussels approves $7.4bn Oracle-Sun deal, Oracle to Outline Strategy Next Week

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The European Union has today formally approved Oracle's takeover of Sun Microsystems. The EU has been investigating the merger since September 2009 under EU Merger Regulation, expressing concern that Oracle may try and kill MySQL, a move that it felt could potentially have a detrimental impact on competition in the database market. Launching her investigation, outgoing Competition Commissioner Neelie Kroes stated:

The Commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company. In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover. Databases are a key element of company IT systems. In the current economic context, all companies are looking for cost-effective IT solutions, and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions. The Commission has to ensure that such alternatives would continue to be available.

Speaking today she stated, “I am now satisfied that competition and innovation will be preserved on all the markets concerned."

The Commission's press release argues that PostgreSQL offers a credible alternative to MySQL in the database market, and further that MySQL's open source nature means that "forks" of the MySQL code base might also develop in the future. The Commission also examined the potential impact of Oracle's acquisition on the intellectual property (IP) rights connected to the Java development platform in the context of the proposed transaction and found:

…Oracle's ability to deny its competitors access to important IP rights would be limited by the functioning of the Java Community Process (JCP) which is a participative process for developing and revising Java technology specifications involving numerous other important players in the IT industry, including Oracle's competitors.

The Commission also found that Oracle would not have the incentives to restrict its competitors' access to the Java IP rights as this would jeopardize the gains derived from broad adoption of the Java platform and therefore the proposed transaction would raise no competition concerns in respect of the licensing of IP rights connected with Java.

In Europe, opposition to the deal – and concerns about the impact on MySQL – have been raised by a number Oracle's competitors, including Microsoft, SAP, and MySQL co-founder and former Sun employee Monty Widenius. Widenius has overseen a slew of measures that are designed to keep MySQL alive outside of Oracle, including starting the MariaDB fork of the code and forming "the Open Database Alliance" to unify all development.

Responding to today's announcement Florian Müller, a Munich-based open-source software campaigner and spokesman for Widenius, claimed that the Commission’s decision is "based on wishful thinking for the future more so than anything else", going on:

PostgreSQL has been around for decades without having had its mainstream breakthrough, so the European Commission can't seriously claim that PostgreSQL could replace MySQL as a competitive force.

The Swiss antitrust regulator also cleared the deal today, and Widenius is now focusing on trying to block the deal in the Chinese and Russian markets, stating the process could not be considered to have finished "until those major jurisdictions have also taken and announced their decisions".

Widenius' campaign hasn't had universal support even amongst former MySQL employees. Ex MySQL CEO Mårten Mickos - and the ex-head of Sun's database group - not only dismissed concerns over Oracle's ownership of MySQL, but also called on the EU to approve Oracle's purchase of Sun in a letter to Neelie Kroes dated October 8. Former JBoss CEO Marc Fleury, who presided over JBoss's acquisition by Red Hat for $350m in 2006, also weighed in recently, publicly reprimanding Widenius in his blog and arguing that his actions could damage the future of open source software.

Whilst Widenius may be hoping to further delay the deal, Oracle clearly isn't too concerned and has already announced that its chief executive, Larry Ellison, will outline a strategy for the combined companies and their roadmaps via a webcast on January 27th. Oracle is aiming to squeeze $1.5 billion in operating profit from Sun in the first year after the deal closes in the next few weeks.

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