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ECommerceTimes.com

Ellison: Oracle Hearts MySQL

By Erika Morphy
Sep 23, 2009 12:38 PM PT

Oracle CEO Larry Ellison can be a wellspring of newsworthy comments. Little wonder, then, that for close to an hour on Tuesday, IT journalists were rapt as he ruminated on the subjects of the day in an interview with Sun Microsystems' Ed Zander at the Churchill Club in Silicon Valley.

Ellison: Oracle Hearts MySQL

Ellison didn't deliver any of his trademark colorful zingers, but he did give shareholders a heads up concerning his own future -- he plans to stay at Oracle's helm for at least another five years -- along with some insights into his company's pending acquisition of Sun, a deal that's now under the scrutiny of the European Commission.

About 30 minutes into the interview, Ellison addressed why the Sun deal will likely be greenlighted: "If they want someone to compete with IBM, Sun has the technology to do that."

More interesting tidbits followed, providing glimpses of possible, long-term strategic motives underlying the acquisition.

Whither MySQL?

For instance, even though Sun is losing about $100 million a month due to the delay in the merger, according to Ellison, Oracle has no intention of selling off MySQL to satisfy Europe's concerns.

"We never compete against MySQL," he maintained.

Furthermore, MySQL is likely to play an important role in Oracle's future. "He is going to need MySQL for when Sun is part of the Oracle family," said David Boulanger, an analyst with Frost & Sullivan's industrial automation and process controls practice.

Ultimately, the Sun deal is about IT domination at the IBM level, Boulanger told the E-Commerce Times.

Ellison hinted at that himself: "We are very happy to compete with IBM on a level playing field," he said in the interview.

Combining Sun and Oracle technologies, Ellison said, will lead to the point where "we can succeed and beat IBM."

That's the goal, he said.

The Big Picture

With that goal in mind, Oracle's intentions regarding MySQL make sense.

"Oracle is going to need every bit of the technology it acquires for its long-range plans," said Boulanger.

Indeed, Ellison said there will be no spinoffs of Sun properties -- not its hardware division, not its storage, not its x86 nor its SPARC technology.

In fact, "we are going to increase the investment in it," he said. "Sun has fantastic technology."

It's not a done deal yet, though, Raymond Van Dyke, partner with Merchant & Gould, told the E-Commerce Times.

A Sticking Point

One of the sticking points will be whether Oracle, a world leader in database solutions, is willing to promote Sun's MySQL database product, which is open source, he cautioned.

Despite the Obama administration's increased scrutiny of mergers, the U.S. Department of Justice has already approved the Oracle-Sun deal, saying it would not constitute a restraint of trade, noted Van Dyke.

"As with many prior U.S.-approved mergers, however, the Europeans view the anticompetition laws differently, and view large companies suspiciously merely for being dominant in the market," he pointed out. "Consequently, Oracle is in their bull's eye."

Nevertheless, Oracle has begun integration with Sun, Van Dyke noted, forming database machines and other new hardware-based applications.

"Hopefully, the EU will approve the merger by the January 19, 2010, deadline," he said, "and stem Sun's $100 million-per-month losses."


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