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).

This is the battle I have been waiting for (at least until November 15 when New England takes on Indy).

I must admit part of my lust is just for the sport of it… to see Ellison do what Ballmer should have done. But it’s deeper than that. The statement of objections reportedly filed by the EU Competition Commissioner against the Oracle (ORCL)/Sun (JAVA) merger pits the statism of the 50-year European Union (EU) attempt to nationalize industries and markets, including a score of failed attempts to spawn an EU information technology (IT) industry and various EU IT markets, against a future world order totally tilted to the western part of North America and the rest of the Pacific Rim in all things economic and political, not just IT.

In dueling blogoshots released in October 2009, the two Finns most associated with the MySQL database software company, which they sold to Sun (JAVA) in 2008 for a bazillion markaas, are urging the European Union in opposite directions when it comes to Oracle’s (ORCL) takeover of MySQL (by virtue of Oracle’s pending acquisition of Sun).

Marten Mickos, the CEO of MySQL from 2001 to 2008 and now an entrepreneur in residence in Silicon Valley at big MySQL cash-out winner Benchmark Capital, says

In reading about the almost Microsoft (MSFT) agreement with the European Union (EU) announced October 7, I feel Microsoft investors have finally gotten a good deal from the EU regulators. The mounting opposition to the deal is my proof-point. Just as the Opera (OPESF.PK) company executives that started the anti-Microsoft browser complaint in EU now feel chained to an EU Competition Commission (EUCC) boat anchor being thrown overboard by Neelie Kroes' abandoning ship, Free Software Foundation Europe (FSFE) executives are also worried by what looks like a done-deal agreement between Kroes and Steve Ballmer.

The oddly named European Committee for Interoperable Systems (ECIS) is supposedly against it but has not posted a formal statement. [It's oddly named in that the leading members of the "European Committee" appear to be the North-American-domiciled corporations Adobe (ADBE), Corel, IBM, Oracle (ORCL), Real Networks, Red Hat (RHT) and Sun (JAVA).]

The failed Norwegian browser provider, Opera (OPESF.PK), says it is not sure about the Microsoft (MSFT) proposal for a European-Union (EU)-mandated “browser ballot” to be used with Windows 7 as an alleged means to lessen Microsoft (MSFT) Internet Explorer (IE) market power. According to one of the UK information-technology rags (I now can't find the link), Håkon Wium Lie, Chief Technology Officer at Opera, said:

"Opera Software supports the concept of a ballot screen to give users easy access to better browsers. The important question is how this ballot screen is implemented. We are still studying the announcement from the European Commission and will have further comments at a later stage."

Red Hat (RHT) executives briefed financial analysts October 6. The key question I brought to the session was,

“Where does Red Hat stand against its previously announced plans to gain half of market share in server operating software (see Feb 14, 2008 entry) and middleware during the 2010-2019 decade?”

As described in my recent post, "Microsoft (MSFT) Puts 'IT Investment Research' Out of Business", Microsoft’s Windows Live and related services businesses are a train wreck. Back at the end of its 2009 fiscal year in July, Microsoft announced some reorganization changes for this group. On Tuesday September 22, Microsoft provided more details. The answer is not substantive change but simply to bury the Windows Live losing operation in the cash-cow Client Division where its fiscal-year-2009 $520 million in revenue and $560 million in losses become invisible in the cash-cow’s 15 billion spots. Microsoft will also bury Mobile Services over in the Entertainment and Device division ($50 million in losses on $70 million in revenue), with its $7 billion worth of X-boxes and mice. Office Live and the CRM Software as a Service (SaaS) business have been in the Office-brand-dominated Microsoft Business Division (MBD) for some time.

Microsoft will probably give investors some color on how the services businesses are doing for a few quarters but clearly the intention is to bury these dogs the way Microsoft buried its five flailing Dynamics ERP/CRM businesses into MBD--where 90% of the revenue is Office--back in 2006, once it realized it could not integrate the applications products as originally planned when it acquired Great Plains and Navision.

A Forbes article posted the morning of August 4 begins,

“Few doubt that, if all business software currently in use were available through the Software-as-a-Service model 10 years ago, the percentage of SaaS implementations would be much higher today.”

Microsoft (MSFT) took the gloves off in its July 30 Financial Analysts Meeting. The company may have been more aggressive in the past but I don't recall it. I believe the previous strategy was to pretend there was no competition, the old IBM strategy when it had to compete against the seven dwarfs.

Instead, between the opening remarks from Steve Ballmer, speaking as interim but outgoing head of the Windows division, and Kevin Turner, the COO, no competitor went unmentioned.

In March 2008, I called ERP a poor second cousin at Microsoft (MSFT).

On July 27 I wrote that Oracle (ORCL) should consider selling the remnants of the J.D. Edwards business to Golden Gate/Infor because the loyal IBM AS/400 (System/36, System/3, etc. working backwards) users probably don't want to "fuse" anytime soon. And sooner or later the old-ERP-product maintenance revenue stream game is going to become counterproductive for Oracle in terms of both bad PR as well as actual revenue.

Is Tom-Tom (TMOAF.PK) an open source company? Two separate blog posts—one on InfoWorld by respected tech journalist Bill Snyder and one by a self-proclaimed Free and Open Source Software (FOSS) zealot whose blog I’m not familiar with—popped up in my Google alerts on July 26 saying or implying that Tom-Tom is an open source company. In the Synder article, Bill was quoting Rivermuse’s Dave Rosenberg. In the blog post by Hans Bezemer, the post linked to a straight business-news story about Microsoft (MSFT) suing Tom-Tom. The news article appeared in the Seattle Post on February 25, 2009. Microsoft suing Tom-Tom was bad form in the eyes of FOSS zealots.

TomTom is a 20 year-old Dutch company that makes personal navigation devices. Its shares are traded on Euronext. To write this post I downloaded TomTom’s latest prospectus from its website. To accomplish that I had to say I was a Brit, a crime apparently equivalent to formerly (maybe still true?) ripping the tag off a pillow that says “Do not remove this tag under penalty of law” in the United States. Despite the difficulty an American faces in downloading the prospectus, the document contains a stern warning about something or other to inhabitants of the State of New Hampshire (as in one of the 50 United States). I dunno?

All the usual suspects except IBM (IBM) rounded themselves up on July 22, 2009 and started something called Open Source for America. Here we have Sun (JAVA) and Oracle (ORCL), there we have Red Hat (RHT), and in this corner are Google (GOOG) and Yahoo (YHOO) working together. From the moutains to the praries, sea to shining sea, so to speak.

A number of companies in this same group has specialized in starting and funding innocuous sounding front groups in the European Union for years. There is also a long list of these information-technology suppliers' camp followers saluting the stars and stripes along with Google, IBM, Oracle, Sun and Yahoo. The group must feel that now that a Democratic government has taken over in the United States, a government that is more like European governments according to some political pundits, the front-group marketing technique will be effective in Washington.

The proxy statement filed with the SEC on July 13 by SoftBrands (SBN) concerning Golden-Gate/Infor’s upcoming acquisition of SoftBrands says there was a surprising amount of interest in the almost forgotten Fourth-Shift/AremisSoft, which seems to have been considered the jewel in the company's protracted march to Infor obscurity. And the proxy illustrates why ERP enterprise software, despite the façade of cross-industry general-accounting and human-resource-management marketability, has always really been a very, very industry-specific investment play.

That Infor and its financiers picked up the pieces is not surprising. I’ve lost count but I think Infor is now well north of owning 50 old and once highly respected enterprise application brands. But that parties A, B, C, D, E, F, G and H also showed interest, in some cases did due diligence and—in at least two cases—entered bids says other struggling ERP suppliers can find an end game other than dissolution. (I also wonder if this is where the TARP funds that everyone in Congress is trying to find are ending up—financing risky mergers and acquisitions.)

I can’t find any useful IT investment research information on Google’s (GOOG) Chrome operating system from the source. The only meaningful thing Google has said publicly that I can find is via a blog post on July 7 that says:

“…announcing a new project that's a natural extension of Google Chrome — the Google Chrome Operating System. It's our attempt to re-think what operating systems should be.”

Since the June 26 announcement that the U.S.-Democratic-party Department of Justice (DoJ) was taking Oracle's (ORCL) acquisition of Sun (JAVA) off the fast track because of a "narrow licensing issue" related to Java, I have posted my guess that it had something to do with the GNU General Public License (GPL) under which a lot of Sun software is currently licensed.

Dennis Gaughn of AMR is quoted in InformationWeek with the first viable alternative theory I've seen. (This as opposed to the hysterical or non-Java-related theories that have been thrown against the wall in the last two weeks.) Dennis' thought is that the DoJ is concerned that so many enterprise applications companies use Java and that enterprise applications is a market in which Oracle participates.

In a June 30 post I noted that there were a lot of wild theories starting to circulate about why the Obama Department of Justice (DoJ) is investigating the Oracle (ORCL) acqusition of Sun (JAVA). The noise level has ratcheted up as the mainstream media--digital and otherwise--grabs on to the story. The new opinions don't align with a statement from Oracle's outside counsel that the DoJ hold relates to a "narrow issue" about how Java is licensed.

Don't let these misleading articles influence your investment strategies.

Just as I saw some rays of hope in Oracle’s fiscal-fourth-quarter bad news reported on June 23, I see some seeds of rain in the forecast in Red Hat’s (RHT) fiscal-first-quarter good news reported on June 24. Tout sheets like The Register and the technical press look at Red Hat (RHT) revenue numbers in the same way they look at enterprise software suppliers such as Oracle (ORCL). But the key number for Red Hat, because of its subscription revenue model, is deferred revenue as with other information technology [IT] service suppliers (such as EDS before it was acquired by HP or Shared Medical before it was acquired by Siemens).

Forget the double-digit growth numbers headlining many articles in the press. In the last three months, Red Hat deferred revenue grew only $24 million (4%) or $3 million (flat) depending on how you look at it. This exchange between a financial analyst and Red Hat includes the detail:

It is a 50/50 proposition that a Speaker of the Massachusetts legislature gets indicted. In the last 50 years, the state has had 10 speakers, and at least half have been indicted (Thompson, Flaherty, Finneran and Dimasi) or heavily investigated (a few of the other 6).

On another plane, in the information technology [IT] world, Massachusetts is well-known as a key spawning ground of the IT era, although that's just history now; Western Electric from way back when, the IT work at the universities during World War II (where supposedly Grace Hopper found the first computer bug), Raytheon and Honeywell starting up a venture in the 50s (where Paul Allen worked in the early 70s before he left to start up his own little PC-related company with his high school friend Bill), the minicomputer revolution during the 60s and 70s, the creation of Lotus 1-2-3 and Visicalc, which are credited with moving those left-coast PCs out of hobby status (at least the inventors worked here before they wrote them so I assume the software started here too), the mini-supercomputers during the 90s, which led to a lot of today's virtualization and shared-memory/shared mulitprocessing-based cloud computing.