Round Table: 2009 in the rearview mirror, Pt. 2

Dave Webb (Editor, ComputerWorld Canada): Oracle and Sun.

Rafael Ruffolo (Staff Writer, ComputerWorld Canada): That was my pick, too, for story of the year.

Kathleen Lau (Senior Writer, ComputerWorld Canada): The most recent update was the fact that Oracle issues its “10 Commitments” toward MySQL, which is the open-source database. And I think that was the issue that the European Commission had with them, and where they saw anti-trust issues, so now there’s those 10 Commitments for the next five years, which includes stuff like increased R&D, and that sort of thing, I think we’ll actually see the acquisition go through. I don’t think there should be any more barriers anymore. One of the issues that the open source community still has is what will Oracle do after the five years, so that’s their issu. They don’t know if Oracle will continue to do what they said they’d do for the first five years. Personally, I think Oracle will. I don’t think the MySQL database competes with its own database; they’re in completely different markets, so I think it’s in Oracle’s best interests to keep investing in MySQL because it will help them enter into the SMB market, where they don’t have much presence right now.

DW: I don’t buy it. I just don’t. I tend to think of Oracle as a database company, not an ERP company, and I can’t picture Larry Ellison hanging onto a free product that competing with what their core product is. It’s just not the Oracle way.

Jeff Jedras (Senior Writer, Computer Dealer News): Maybe he has enough money already.

KL: I don’t think it’s competitive.

RR: I don’t really think it’s competitive and I don’t even think that’s the whole issue in all of this. In the end, these delays have just damaged Sun so badly. There’s so many stories coming out now of HP and IBM just stealing away customers from Sun, and, by the time this whole deal goes through, and Oracle even figures out what they’re going to do with all this, it’s almost going to be a shell of the $7.4-billion company that they bought. I think the deal just blew up in their face, really, and I think it’s irrelevant whether they stick with MySQL or not. It’s not gonna matter.

KL: When Oracle first said they wanted to buy Sun, the story was that it was Java that they were really interested in and everything else was a byproduct, so maybe there is a bit of truth in what you’re saying. The whole idea of an ERP company — I don’t think it will exist in the next few years. I don’t think this whole idea of ERP will continue flying, so Oracle had better move onto something else. I think it should invest in other areas.

DW: They’ve gone from being a software company to being a software and hardware company. It’s a time-honored practice in the newspaper business: you buy a competitor for its bones, which is its circulation list. Sun has lost a lot of the “bones” to HP and IBM while this process goes on and on. If Oracle wants to compete as a hardware and software company, they’re also going to have to get into services, and have their own whole stack. And this delay and the customer losses they’re experiencing because of it is going to make that a pretty tenuous proposition.

RR: They bought Virtual Iron just before or just after, and Virtual Iron customers were furious at them and they lost a lot of customers.

DW: They fled.

RR: There’s going to be so many virtualization companies that they’ve never heard of that are going to be bought up over the next couple of years, and from players like Cisco, VMWare, Microsoft, and maybe Oracle.

DW: With respect to having that whole software/services stack, you can’t grow a services arm overnight. Obviously, if they want to go that way, they’re gonna have to buy something. EDS is off the table, of course, so where do they go from there? Computer Sciences is still in play.

JJ: This has been a very big story for the channel because Sun has been a company with a fairly strong partner program, and Oracle can’t really say the same thing. They’ve never been a strong channel player. They do have a program, but it’s never been a very strong, active program, and, as the acquisition has dragged on these many months, there’s been a lot of anxiety among the Sun partner community. They just don’t really have any idea what their place will be in the new merged company, which products will stay or go, and just what Oracle’s commitment to the channel will be, which makes it pretty tough for them to invest in the Sun portion of their business because they’re also hearing from their customers, who are concerned about what is the future going to be if I invest in the Sun platform, where’s the maintenance going to be, and what are the updates, so there’s a lot of anxiety. I don’t think we’ve necessarily seen partners leaving Sun, but many of them have been scaling back the Sun portion of their business and looking to alternative vendors as they wait for this to play out.

RR: You can’t blame them for getting a little impatient now.

KL: Oracle’s always had a really good history of dealing with their acquisitions — they’ve done it so much that they’re actually pretty good at it. The fact that it was delayed wasn’t really their fault, but the European Commission’s. But going back to what Dave was saying about Oracle now becoming a hardware and a software vendor, and will eventually probably need to build a services arm as well, I agree with that. I’ve read about vendors moving back toward that, to how vendors used to operate, which was not the pure-play, but more of the all-encompassing vendor, sort-of like HP is doing now, with the services, the hardware, the software, and all that stuff. So I think that Oracle, although it will be difficult to build a services arm overnight, they won’t have a choice. I think they’ll have to.

DW: Build or buy, though.

KL: Definitely buy.

JJ: You have to wonder, though: is it good for the market? Is it good for innovation to have one huge monolith? Where’s the innovation in the market if you own the entire stack and you have huge market share, and there’s not an ecosystem that is pushing each other to innovate and grow and compete? Now you’re going to see stagnation in the market if Oracle succeeds in their master-plan.

Brian Jackson (Staff Writer, IT That might be true if Oracle was the only player out there doing it, but you have HP going down the same route, Microsoft is already there pretty much, and IBM to some degree. That’s enough to have some drive for innovation, isn’t it?
Next up: What’s on Cisco’s agenda?

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