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Oracle plus BEA…Sun Plus MySQL

Just when it began to look like BEA might take itself private, the company gave into the mounting pressure and became the latest Oracle acquisition. A few months ago I wrote about my thoughts on the potential acquisition. While on the surface it might appear that Oracle is going after the customer base, I think that the move is more significant in terms of the software assets including middleware and business process management software. An interesting and little discussed asset is the high end Tuxedo transaction monitoring software developed by Bell Labs in the 1980s and commercialized by AT&T Unix Systems Labs, then owned by Novell and finally sold as part of the formation of BEA.

So, I think that Oracle did the right thing in acquiring BEA to fill in its middleware stack. However, the real question remains: how will Oracle be able to rationalize all of the middleware components to create a platform. For example, I predict that it will take years for BEA to have a Fusion middleware stack that incorporates BEA’s value. The same issue will persist for business process software. The assets from various acquisitions will have to be sorted out. I thought that James Governor made some interesting observations in his recent blog on Oracle. Josh Greenbaum, as usual has some interesting thoughts about Oracle’s approach to the market…At least where Oracle is concerned, we won’t be bored.

Now, about Sun Microsystems. I have to say that the acquisition of MySQL left me scratching my head. Sun seems to have taken on the mantle of the place where software goes to die. Can you spell Forte (a development environment with $80 million in revenue that Sun acquired for $450 million — what a deal!)? How about other notable acquisitions like NetDynamics, and Netscape Application Server? There are others, of course, but I can’t remember their names anymore. Even with the Java franchise Sun hasn’t figured out how to make money on software.

So, what about MySQL which Sun payed $1 billion dollars for? Jonathan Swartz in his blog makes a case that Sun can win in the market though a focus on open source software. While commercial support of open source is important for customers I suspect that it won’t really help Sun’s revenue climb. Clearly, one of the reasons that MySQL has been successful is that it works and is open source — I can’t figure out how Sun will leverage this asset to build a successful commercial business.

  1. Sid
    January 20, 2008 at 6:18 pm

    I think you are out of touch with latest times with respect to Sun.
    Comparing with Forte, Netscape and NetDynamics acquisitions which occurred during a business environment that did not much involve open source and a completely screwed up business model with a management to match does not make sense now. I think the Sun management has some really sharp guys opting to take the long road to revenue which will get them the most market share eventually with revenue to match.
    Most companies and Governments today are looking at open source products with commercial support and most importantly, indemnity which none of the non business types do not necessarily understand or care for. But it matters to top decision makers.
    License based infrastructure software is undergoing serious review among many CTOs and this is virally spreading. The tide has changed from CTOs forcing down technological and technical solutions to their developers to developers bubbling up their recommendations with a pretty significant stake.
    And open source software plays a big role here. Developers love well written open source software, CTOs love commercial support offered by companies like Sun.
    MySQL as Jonathan points out in his latest entry on 19th Jan, makes huge sense for Sun and its customer base. Large companies have a choice now with commercial support from a company like Sun with a great open source database like MySQL. Moreover, Sun offers both LAMP and SAMP stacks along with other significant open source offerings such as GlassFish, Netbeans, Java, all of which attract tremendous developer support and CTOs who care about indemnity and quality.
    This should give you clues on how money is made in commoditized software.
    Hope this helps.

  2. January 21, 2008 at 11:26 am

    Judith,

    I’m not quite as down-beat over MySQL and Sun as you –

    You’re absolutely right that the Forte buy (which came about 3 months before the world realized that Java was going to destroy the high-end client-server tools market) was silly.

    NetDynamics and Netscape were monumentally bad choices (How one of the inventors of J2EE could have bought not one but two app servers that were built on frameworks that were incompatible with J2EE still boggles my mind).

    But Sun did well with it’s IDM play, and is reconciling with the OSS community.

    There’s no reason why Sun couldn’t be a great place to get great OSS infrastructure software from.

    The “commercialization” question is gnarly; Sun has been really bad at explaining how it’s OSS plays are going to make it money – Which is a real danger sign. If you can’t explain how your open source strategy is going to make you money, then it’s probably a pretty rubbish strategy.

    But… Sun could see its way to selling a whole lot of tin off the back of a decent OSS stack.

    I’m not saying that Sun _will_, but it _could_😉

  1. January 21, 2008 at 11:45 am

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