EU Objections to Oracle / Sun: Distortion of Market Dynamics Is Bad for Everyone

In a November 16 blog post, despite the cursory view of some analysts who say withdrawing from the European Union (EU) enterprise-software market is not feasible for Oracle (ORCL), I wrote that Oracle's withdrawal was not only feasible but something Oracle’s board is really obligated to consider. Microsoft (MSFT) in fact mentions the option specifically in its SEC filings in discussing its always contentious dealings with the Eurocrats. The catalyst for the blog posts is the EU Competition Commission’s statement of objections against the Oracle acquisition of Sun (JAVA), objections reportedly based on Sun ownership of the MySQL relational database product. (I say ‘reportedly’ because the EU, with all its fondness for openness, does not openly release its statements of objections.)

It’s interesting the way the debate spins out from that point. Over on Information Week, Bob Evans has already written Larry Ellison’s withdrawal letter to its EU customers, calling European information technology (IT) professionals to the barricades against Neelie the Sixteenth (or Neelie Antoinette, whichever you prefer). At InfoWorld, Bill Snyder talks to a lot of open source gurus and finds that no one except the MariaDB MySQL fork guys stand to gain.

When Bill called me about my November 16 post, he asked,

But why would Oracle want to give up a four-to-six-billion-dollar annual revenue stream for the trivial revenue stream MySQL generates?

It’s a good question but my answer to Bill is: It doesn’t matter to me why Oracle wants MySQL.

The issue is that the EU shouldn’t be able to tilt the playing field in favor of the EU homeboys trying to start the company that Snyder references. The EU has similarly tried to tilt the browser market playing field in favor of some Norwegian whiners with their free-market-loser product called Opera.

This distortion of market dynamics by politicians is bad for EU IT consumers and it is bad for enterprise software suppliers in general. And it's probably even bad for the EU. Oracle’s opening position at the meeting on November 25, if it hasn’t told the EU this already, should be: "Approve the Sun deal or the new Snoracle does not do business in the EU."

Close down that factory in Scotland and the warehouse in the Netherlands. Send your citizens over the border into the Ukraine to get new software or to the UAE for training. (I assume they are already getting their software maintenance calls answered from India.) Take out maybe 20,000 EU jobs. At such a high percentage of the total workforce as compared to percentage of the revenue stream the EU will contribute to Snoracle, it would be well worth it even with onerous severance payments.

And Oracle shareholders will also save the multi-billion-dollar payments that the EU weaseled out of Steve Ballmer.

And then as Bob Evans points out, listen to the EU citizens scream at its Competition Commission.

Comments

[MyOracle]

Yawn. Now this is getting boring. Dennis Byron really hates Europe. It's official. Blog after blog it's the same old school playground "my daddy is bigger than your daddy" pro-American childish rubbish.

2009 Nov 20 10:20 AM

[Carousel]

the eu is the only policeman working to eliminate criminal monopolistic scumbags from the us stealing from the public

the us is worse than useless ... it is a wide ranging deep active criminal enterprise or conspiracy ... the us political system and the large corporations are completely criminalized ... at the political and corporate level they're a nation of thieves

they've wrecked the global economic system, slaughtered millions in their continuous wars of imperial plunder ... their congress and presidency are totally criminal operations ... it's a plutocracy ... unrelated to the democratic drivel they spout

good on the eu for stopping these nasty criminal thugs from scheming to plunder and wreck europe

2009 Nov 20 10:47 AM

[User 3473]

I hate Europe (I mean those Eurocrats) and I am an European. Just look at the new wimp appointed yesterday by European countries to act as their new president. An old Belgian guy in his sixties who is suppose to be Europe's answer to Obama. It was a done job - appoint a relatively unknown old man to act as president - he could do no harm to the current set of European political leaders. So much for democracy. All the European countries whose people were asked to vote on Europe overwhelmingly voted NO.

Oracle is right to tell Ms Kroes to piss off. She has only a month left before she disappears for ever.

Mr Dennis Byron is right on the ball about Europe which is more a concept than anything else.

2009 Nov 20 10:53 AM

[User 516150]

Ever notice how the same old crap just keeps coming back around....like a carousel? No, Oracle is just standing up to these worthless EU bureaucrats. And you watch, they'll win.

2009 Nov 22 11:15 PM

[BeachRider]

Dennis is purposefully overstepping the point and (I hope) holding up a mirror to the EC decision-makers. The EC's stated purpose for holding this up is applicable to open-system environments, but not to open-source-system environments. Sun makes 'bagel' from software licensing on MySQL, IT IS OPEN SOURCE. They make money from support of the Open Source. Anyone can do the support, if they want. Anyone can issue source changes to MySQL, if they want. That is exactly what SUSE and RedHat do with Linux.

Attaching this issue to pro-European or pro-American slogan is indulgent. There are ways to be pro-EC or pro-US, but they are ancillary to the stated reason for holding up this transaction.

The EC is deflating the value of MySQL, the JAVA stockholders are being damaged, not Oracle. My bet is that the JAVA purchase will go through for LESS than ORCL originally offered. If you are an ORCL stockholder, you have reason to cheer on the EC to delay this activity indefinitely.

2009 Nov 23 12:59 PM

[axerzes]

This whole affair is a stunt by Monty Widenius who wants to
pull a Skype -- try to sell his baby twice to US suckers.

He sells out MySql to the sucker Sun, gets out of his
non-compete with Sun, forks MySql into Maria, and now
needs the dual-licensing revenue stream for Monty Program
Hence he goes whining to EU to force Oracle to either a)
divest MySql to his proxy company or b) change licensing terms
from GPLv2 to GPLv3 that allows Monty Program to have a
dual-license revenue stream.

Unfortunately, the EU doesnt have a proper framework to analyze
competition, and gives in to such stunts based on a he-said,
she-said analysis

And unfortunately for Monty, in this case, he is taking on a wily
opponent

2009 Nov 28 12:34 PM