Former MySQL CEO Mårten Mickos sent a letter to the European Commission’s top antitrust authority, urging her and her regulatory body to approve Oracle’s takeover of Sun Microsystems, which owns his former company.
Sun (NASDAQ: JAVA) purchased MySQL in 2008 for $1 billion, and Mickos departed a few months after that.
Now Oracle (NASDAQ: ORCL) is looking to buy Sun, but the process of securing regulatory approval has dragged on interminably, all the while Sun is losing money and customers. Oracle CEO Larry Ellison recently said that Sun loses $100 million every month the deal is delayed.
The U.S. Department of Justice took five months to approve the transaction. But just as the DoJ gave its thumbs up, the EC announced plans to investigate the deal based solely on the premise of Oracle having MySQL, a competitor.
Many American analysts have complained that the delay does nothing but hurt Sun. Mickos concurs.
“Every new day of uncertainty is potentially very harmful to the various businesses of Sun, reducing competition in the market,” he wrote in his letter to EC Commissioner Neelie Kroes. “A delay in the closing of this transaction is therefore only going to work against the respectable goal that you set out to achieve when launching the probe into this acquisition.”
Mickos pointed out that Oracle couldn’t hurt MySQL if it wanted to, and far from hindering the open source movement, it has actually helped it.
“Even if Oracle, for whatever reason, would have malicious or ignorant intent regarding MySQL (not that I think so), the positive and massive influence MySQL has on the DBMS market cannot be controlled by a single entity — not even by the owner of the MySQL assets,” he wrote.
“Many expected Oracle to harm MySQL as far back as 2005, when they acquired the InnoDB storage engine that plays a crucial role for many MySQL customers. And yet Oracle increased their investment in InnoDB since that time, making MySQL a stronger player in the market.”
Will it work?
Will Mickos’ appeal to speed along approval work? Opinion is mixed.
“It may have some sway, but by nature that governing body is super independent and they just seem like a group that does not like to be told what to do, no matter who it is. So that may some sway but I think [Oracle] may have to make some kind of concessions,” said Scott Testa, a professor of business administration at Cabrini College in Philadelphia.
Charles King, principal analyst for Pund-IT, takes a more optimistic view.
“If the EC’s concern is how Oracle will manage the software, then having the former CEO, who has great credence with the open source community, come out and say it’s all good, I wouldn’t say it’s a slam dunk, but acting essentially as a character witness for Oracle could help,” King said.
But Martin Reynolds, research vice president and fellow with Gartner, doesn’t think it makes a bit of difference.
“You have to ask yourself, is there any possibility this gentlemen has any compensation from Sun in the form of stock that he stands to gain from an oracle buyout,” he said.
Mickos said in the letter and again on his Twitter feed that he does not. The question will likely keep coming up, though.
“Second is why is the EC pursuing this, and the answer is mostly likely complaints from SAP and IBM,” Reynolds said. “Generally speaking with the EC, when they investigate someone, there’s somebody behind the scenes instigating it. Microsoft has Opera behind it, Intel has AMD. So you have to ask who is behind it?”
The analysts agreed, however, that the deal will likely close quickly, something both Sun and Oracle want.
“I don’t see this going on for a long time,” Testa said. “I see Oracle making a few concessions but I don’t see this deal being stopped. And I don’t think the commission is going to labor this as long as some of these other investigations.”
“I’m not sure that simple verbal assurances would be enough to really push things in a highly beneficial way for Oracle. The EC may want more tangible guarantee of how the company will manage MySQL and what their plans are for it,” said King.
Passing on Brocade
Networking vendor Brocade made news earlier this week when it announced it is putting itself up for sale. Immediate speculation of potential customers included HP (NYSE: HPQ) and Oracle.
However, Oracle happened to be holding its annual shareholder meeting on Wednesday and the subject came up. Ellison said flatly that Oracle is not interested in Brocade.
He was also confident that the deal with Sun would go through and said Oracle had “no intention of divesting anything.”
