Is it just me or did anyone else ROFL when they learned about the pending Snoracle merger? On one hand, you have a company (Sun) that pioneered and embraced open source (UNIX, Java and MySQL). On the other (Oracle), you have something more along the lines of Star Wars’ interstellar crime lord Jabba the Hutt: "As long I get my cut, everything's good."
Oracle chairman Larry Ellison says: "The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems. Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."
Sun CEO Jonathan Schwartz had this to add: "This is a fantastic day for Sun's customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace."
Oh, really? So Ellison and Schwartz want us to believe that their primary motivation was to make everything better for their customers and the industry. Oracle and Sun simply saw an opportunity to drive value and innovation across the technology marketplace. That's nice, but I'm not buying it.
CIOs, you may want to stop doing that happy dance now.
During an April 20 analyst call, Ellison called Java "the single most important software asset we ever acquired." Now we’re getting warmer. I agree with Citigroup analyst Brent Thill who said Oracle looked at Java as a $1 billion business even though it contributed just $220 million of Sun’s 2008 $14 billion revenue. Now you tell me: Will Oracle get Java from $220 million to $1 billion by increasing sales, or is it more likely that innovative re-pricing, like the Death Star, is heading our way?
Thrill also noted that Oracle expects half its 2009 revenue to come from the support and maintenance of products its customers have already licensed – support contracts that carry profit margins approaching 90 percent. Given that interesting expectation, can open source maintenance and support fees be far behind?
And, in this brave new world, what happens to MySQL, the leading open source database alternative? How will Oracle monetize MySQL, and will its attempt to extract value from this market backfire into a mass exodus to other open source database alternatives like PostgreSQL?
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