Oracle reported stellar earnings tonight that promises to send the stock up to a 9-year high tomorrow, at least judging by the after-hours activity. The company's latest acquisition of Sun Microsystems, announced back in August, is still pending EU regulatory approval, but the latest signs appear to indicate that it will clear that hurdle soon and complete the take-over. It has already been cleared by the US regulatory bodies.
EU has reasons to be worried about Sun's acquisition by Oracle and it has valid points. I and many others happen to share the same concerns. At the center of this debate is the future of open-source and mostly free products currently offered by Sun and used by millions of users and businesses worldwide. Chief among those products is MySQL, the database engine that powers the majority of Web sites operating on the Internet today. Java, the popular programming language created and maintained by Sun, is another product that's facing an unknown future under Oracle's ownership.
What will happen to MySQL and Java once Oracle takes control of these products? Oracle is playing nice promising innovation and continued support, but can that claim be trusted?
The situation is quite different from a couple of years ago when Sun itself acquired MySQL. Sun didn't have a competing database product and it had a track record of commitment to open-source and free products, namely Java. But Oracle is a different kind of company. Sure, it has solid products, chiefly the Oracle database and it has a proven history of successfully absorbing other companies' products into their mix. But it charges exorbitant prices for its products and its expensive maintenance contracts are legendary in the business. Oracle offers very little, if any, in terms of open-source and free products, and there is no reason to believe it will do so in the future.
What that means is that most likely Oracle will kill MySQL and Java in their current forms and integrate them with the rest of their expensive products. Once it has removed the potential threat, what's the incentive to continue with the free format? At best it may offer watered-down, crippled versions of MySQL or Java that will be useless to most, except perhaps for hobbyists and students.
In the end Larry Ellison will get his wish and Sun will be rolled into the Oracle's collective. The Sun's take-over challenges harken back to 2003 and Oracle's take-over of PeopleSoft. Back then Ellison came out swinging, steamrolling PeopleSoft's board and the regulatory agencies and eventually got his wish. This time around the damage to the industry will be worse, and the only beneficiary will be none other than Oracle itself.