Monday, April 20, 2009

Sun & Oracle Deal: A Battle for the Developer

I believe that many of the pundits have it wrong this morning. I don’t believe that Oracle has any interest in the hardware and systems business long term. They will be looking to line up buyers so they can spin those pieces out. When you’re addicted to the 90+% gross margins that software delivers, why would you be interested in the hardware and systems market which delivers (on average) half those gross margins? Sun’s complete hardware systems business (servers and storage) may even make a nifty IPO, which could net Oracle a gain on the deal if timed and managed well.

Make no mistake, Oracle’s acquisition of Sun is about one thing: the hearts and minds of the software development community. Oracle will now have control of the Java programming language and some of the most important development tools built on top of it. This places them at a level of influence which they’ve not yet wielded and allows them to compete far more strategically with SAP, IBM and Microsoft (Oracle’s true competitors). To prevent developers from fleeing to those competitors, Oracle will need a different and more transparent, collaborative approach than it has ever mustered in the past. This audience will demand it.

But, Oracle’s first order of business will be the rationalization of their new middleware and infrastructure stacks against what they already own. And, of course, the biggest task will be the key decisions taken with regard to the open source and proprietary products. Open source companies and developers need to watch Oracle’s moves in the coming weeks and months very closely. The old adage that with great power comes great responsibility is very relevant here. This will be Oracle’s top priority because it affects the biggest audience and could have a substantial impact on the open source movement in the near term.

Lastly, I believe any speculation on the fate of the much-loved MySQL database is, at this point, premature. While Oracle has plenty of database assets, none garner more appeal with the modern, web-based world than MySQL. Oracle execs will surely understand the most successful use-cases for MySQL and allow it to continue flourishing in those arenas. Where MySQL encroaches on the functionality of Oracle’s main database products, the outlook is murkier. The watch word is stay tuned.

1 comment:

  1. Brian: Completely agree. This is all about the future of software, not hardware synergies. Oracle is willing to take on some hardware complications (at least for a while) in order to call the shots in the software market.

    I was stunned by the news because I didn't think Oracle would want to deal with Sun's legacy SPARC business. But sometimes I guess you need to deal with some of the past to get a firm grip on the future