Why Should Oracle Even Bother with the EU?

With Oracle (ORCL) going to the mattresses with the European Union (EU) over its proposed Sun (JAVA) acquisition, many analysts are suggesting Oracle walk away from Sun. I am suggesting Oracle walk away from the EU. Larry Ellison should ask himself whether it is even worthwhile for Snoracle to do business in such a backwater.

The EU is the place that 50 years after Plan Calcul is still trying to launch a nativist information technology (IT) company to compete with IBM. Larry, ask Neelie about Tulip. Remember Cii and that crazy Siemens, ICL, Nixdorf, Bull, Olivetti thing in the mid 70s. No prolonged effort to get approval of the Sun acquisition is going to change that basic dynamic. No three-year effort to get to the Court of First Instance of Last Resort in Strasbourg is going to be worth spending all that time walking around in Stalinist architecture during days of little sunshine (the EU does not work in the summer and it rains all the time there in the spring).

So why go through the hassle of dealing with EU regulators when it appears the return on investment is so low? That’s especially true if Oracle is serious about keeping and growing Sun’s systems/storage business. Software—the market that Oracle knows well—is portable. But message to Redwood Shores: "With Sun, comes widgets."

So, Larry, this should be the opening position at the meeting on November 25, if you haven’t told the EU already: "Approve the Sun deal or the new Snoracle does not do business in the EU."

(Update on my post of November 10 about not being able to analyze the EU’s statement of objections, I received the following from the EU’s crack PR folks: “We regret to inform you that Statements of Objections are not documents of public domain. They are sent to the parties concerned in the transaction.” So I’ll have to wait until later this week when SAP leaks it to the Wall St. Journal.)

Comments

[lucky lenny:]

Dennis,

I would also add that Oracle appears to be totally overpaying for Sun. EU's bullying may actually be a blessing in disguise for Oracle shareholders if the deal unwinds.

Nov 12 08:03 AM

[User 298174:]

Bunch of crap Dennis, such a big ego, no wonder why so few followers...

Nov 12 09:09 AM

[reyito:]

Dennis,

The EU's statement can be found in Oracle's 8-k filing.

Keep up the good work.

Nov 12 09:11 AM

[JuanMa:]

Arrogance is not a good adviser for doing business. Larry should have learnt the lesson now and you should too, Dennis. Oracle went to Brussels in August, just to find that August is summertime. What a Surprise! And they reacted angrily after Sep 3, blocking any possible negotiation. That's what I call arrogance and a good example of how not to behave. Your euro-bashing remarks are really cheap

Nov 12 09:27 AM

[ukman:]

And I thought Seeking Alpha had credible and incisive analysis! What do we get with Byron? Arrogant, US-centric crap that treats Europe as if it's some monolithic whole when it's culturally and socially diverse. Thank God! We're also spitting blood about the EU decision, but that doesn't mean we have to put up with twaddle like this. Don't give up the day job, mate, as your part time foray into market analysis is very poor.

Nov 12 09:58 AM

[Highonlife:]

Excuse me? Did you just say that the lack of an IBM type company means that they should walk away from the EU?.
So the lack of a competitor makes a market unworthy of your esteemed presence?
And here i thought it was customers thta a company should aim for.....
oh no, lets leave out companies like :
Volkswagon, Porsche, Renault, Daimler-Benz, BMW, Airbus, Nokia, Ikea, Lufthansa, Easyjet, Bayer and god knows how many others.
No ....Oracle only wants to be where IBM is....they dont want to be where the customers are....thats old school......

Nov 12 10:55 AM

[MyOracle:]

Dennis. I see the quality of your work is matched equally by the quality of the photo you have chosen for your blog site. Neither is close to being a professional job. I'm only disappointed I wasted my time reading such a piece of ill-informed uncle-Sam-is-the-best childish rubbish

Nov 12 11:15 AM

[Pili:]

Childish and borderline xenophobe comments. Really reflects poorly on seeking alpha. The EU is the world's largest economy. This blog entry is plain dumb.

Nov 12 03:00 PM

[Dennis Byron:]

Thanks

You are referring to Oracle's statement, which it issud in response to the EU Statement of Objections adn filed with the SEC. I was trying to get the actual document that the EU gave to Sun but the EU says such documents are not public (but someone--probably SAP--will leak it).

Dennis


On Nov 12 09:11 AM reyito wrote:

> Dennis,
>
> The EU's statement can be found in Oracle's 8-k filing.
>
> Keep up the good work.

Nov 12 04:03 PM

[jack dee:]

while I disagree that Oracle should walk away from the EU.

Dennis is bang on target, the EU has been throwing its weight around and supporting EU based companies at the expense of non EU companies


Oracle and Sun combined will not dominate, and as such the EU should simply rubber stamp it and move, but that would not make the EU look big and important so instead they attack any company that competes strongly with EU based ones.

The only answer to date is for US companies to employ high amounts of Europeans in the big countries, high value jobs get the support of the gov and thus the EU buggers off.

SO far jobs and taxes (paying them off) is the only to keep the EU off your back......

Nov 12 04:40 PM

[BeachRider:]

To focus back on the EC, itself...

There is some fear that ORCL's purchase of JAVA will cause MySQL to deteriorate. This could be expected of an Open Standards piece of software, but the safeguards are large with Open Source Software.

Think about how SUSE became an alternate source for Linux maintenance and modifications. SUSE finds it convenient to integrate new Linux Kernel improvements, but it could alter Linux themselves, if it met their marketing needs.

With this, why does the EC have the right to train-wreck JAVA?

ORCL disengaging altogether will harm JAVA (and MySQL). ORCL proceeding as the EC desires will cause a deflated value of MySQL if they choose to fire-sale it (so ORCL should lower its bid).
The EC is knowingly lowering the value of MySQL. Why is that legitimate?

Nov 13 11:09 AM