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Europe To Review Oracle’s Takeover Of Sun

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Guest DisposableHeroes

BRUSSELS — European regulators threw up a road block Thursday for Oracle’s planned $7.4 billion acquisition of Sun Microsystems, saying they would investigate whether the deal would restrict competition in the already “highly concentrated†market for databases.

The deal had been backed by Sun shareholders in July and by the U.S. Justice Department in August, leaving EU consent as the last obstacle to its conclusion. Analysts had expected it to pass muster in Brussels with little fanfare.

But Neelie Kroes, the EU competition commissioner, announced instead that an in-depth investigation would be opened.

Regulators must “examine very carefully the effects on competition in Europe when the world’s leading proprietary database company proposes to take over the world’s leading open-source database company,†she said in a statement.

She said the investigation would examine whether customers of the two technology giants “would not face reduced choice or higher prices as a result of this takeover.â€

Sun, a hardware and software vendor based in Santa Clara, California, was approached on April 20 by Oracle, based in Redwood City, California, about a takeover. Oracle, the No. 2 software maker after Microsoft, wants to gain control of Sun’s MySQL open-source database and Java software.

The deal had been opposed by Oracle’s competitors, including SAP of Germany and Microsoft.

Jonathan Todd, a spokesman for Ms. Kroes, said at a briefing in Brussels that “the enquiry will focus on the extent to which open-source software developers would be able to continue to develop software based on the open-source MySQL database,†which Sun bought last year and which is widely used.

The European Commission has until Jan. 19 to either give its blessing or order remedies, raising the possibility the deal will not proceed as structured.

In the past, the commission has made approval contingent on companies selling assets to reduce market dominance. In late 2008 it helped to scupper the Australian mining giant BHP Billiton’s $66 billion bid for Rio Tinto by demanding the companies sell iron ore assets that had provided the original logic for a combination.

The decision to extend the Oracle-Sun enquiry was a reminder that European regulators are among the most activist enforcers of antitrust law. It was also the latest sign that the growth strategies of technology companies like Microsoft, International Business Machines and Google are running into opposition from antitrust authorities around the world.

It is not the first time the commission has flexed its muscle in dealing with American companies. General Electric’s $42 billion bid for Honeywell International was blocked in 2001 after Mario Monti, the competition commissioner at the time, argued that G.E. could use its financial strength and Honeywell’s strong position in avionics equipment to expand its strength in aircraft engines.

The commission said the Oracle-Sun deal “would bring together two major competitors in the market for databases,†and that its preliminary market investigation has shown “that the Oracle databases and Sun's MySQL compete directly in many sectors of the database market and that MySQL is widely expected to represent a greater competitive constraint as it becomes increasingly functional.â€

“The commission’s investigation has also shown that the open source nature of Sun's MySQL might not eliminate fully the potential for anti-competitive effects,†the statement said. “In its in-depth investigation, the commission will therefore address a number of issues, including Oracle’s incentive to further develop MySQL as an open source database.â€

http://www.nytimes.com/2009/09/04/technolo...amp;twt=nytimes

I'm off to make a nice big cup of Java.

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Sun were such a good, innovative company in their day. It is such a shame to see the parlous state they are are in now. A shadow of their former selves.

Biggest mistake they made was to stop developing Solaris on Intel. That let Linux in the back door and the rest is history. Second biggest was to cripple themselves trying to sue M´soft, no matter how justified. It was a battle they were never going to win.

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Guest DisposableHeroes
Sun were such a good, innovative company in their day. It is such a shame to see the parlous state they are are in now. A shadow of their former selves.

Biggest mistake they made was to stop developing Solaris on Intel. That let Linux in the back door and the rest is history. Second biggest was to cripple themselves trying to sue M´soft, no matter how justified. It was a battle they were never going to win.

I really do like the idea of open source but for large companies how can this be tenable, unless you have massive philanthropy (Ubuntu) or extremely good advertising potential (Google).

The newspaper business is facing similar problems at the moment, not to mention film, music...

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Jonathan Todd, a spokesman for Ms. Kroes, said at a briefing in Brussels that “the enquiry will focus on the extent to which open-source software developers would be able to continue to develop software based on the open-source MySQL database,†.

I don't get this. If it's "open source" how can anybody own it

tim

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Guest DisposableHeroes

I don't get this. If it's "open source" how can anybody own it

tim

Java was created by engineers working at Sun Microsystems. The figure that stands out most of all is James Gosling, widely regarded as the "father" of Java. James and his team were working on a language whose original name was Oak. Oak was designed for embedded devices, such as mobile phones. The first publicly available version of Java, however, was as Java applets, in the original HotJava browser. From there, Java grew to what it is today.

I guess making it open source spread it's popularity, but as a business model!!!

Edited by DisposableHeroes

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This is foolery.

There are already MySQL forks out there: indeed, MySQL's founder is involved. If Oracle were to do anything dumb with it, the community could simply move to MariaDB or Drizzle.

Or to longstanding opensource alternative PostgreSQL.

Or to some new disruptive technology. If and when the world consigns RDBMS to history, Oracle really doesn't want to be a bystander, letalone Public Enemy!

Did Oracle become a 100-billion-dollar company by shooting itself in the foot?

Months of uncertainty serve only to hand monopoly chances to the competition, mostly IBM, while Sun's hands are tied behind its back.

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on a slightly selfish note, Sun are (or were) my biggest customer. looks like another few months floating in space with no income for me...

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There are already MySQL forks out there: indeed, MySQL's founder is involved. If Oracle were to do anything dumb with it, the community could simply move to MariaDB or Drizzle.

Or to longstanding opensource alternative PostgreSQL.

Or to some new disruptive technology. If and when the world consigns RDBMS to history

:lol:

Dream on.

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Or to some new disruptive technology. If and when the world consigns RDBMS to history,..

its all sour grapes on the part of SAP/Microsoft.

If oracle bought tibco, I doubt they'd make a fuss. but that would be a better strategic move.

Oracle bought sun for the service contracts. Just like when compaq bought DEC.

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I'm suprised Oracle hasn't gone up in a puff of smoke already with the IT industry being in the crapper

Hmmm. I think you may not realise just how humongous Oracle really is. They are now an amalgam of at least 50 different software companies, and perhaps 300 or 1000 different products. And I'd say their interest in Sun was because they are so heavily JAVA oriented in their native product set. It was a smart move to take over Sun IMHO. I doubt that they were interested in hardware or MySQL.

But you're right about the IT industry. It is in the doo-doos.

Edited by RockingHorse

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Hmmm. I think you may not realise just how humongous Oracle really is. They are now an amalgam of at least 50 different software companies, and perhaps 300 or 1000 different products. And I'd say their interest in Sun was because they are so heavily JAVA oriented in their native product set. It was a smart move to take over Sun IMHO. I doubt that they were interested in hardware or MySQL.

But you're right about the IT industry. It is in the doo-doos.

Pretty much every business requires IT, it's investment might be down, but it's certainly not in the doo-doos.

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Pretty much every business requires IT, it's investment might be down, but it's certainly not in the doo-doos.

You sure about that ? There have been an awful lot of threads on here from IT types saying all is not rosy in the garden. With some d1ck swinging exceptions of course ! What about the number out of work in previous threads then ?

e.g.

http://www.housepricecrash.co.uk/forum/ind...p;#entry2109134

so you reckon IT in the UK is in a fairly healthy state then ? :blink:

Edited by RockingHorse

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You sure about that ? There have been an awful lot of threads on here from IT types saying all is not rosy in the garden. With some d1ck swinging exceptions of course ! What about the number out of work in previous threads then ?

so you reckon IT in the UK is in a fairly healthy state then ? :blink:

I'm certainly not saying it's rosy, but business rely on it, so there will always be a place for it.

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You sure about that ? There have been an awful lot of threads on here from IT types saying all is not rosy in the garden. With some d1ck swinging exceptions of course ! What about the number out of work in previous threads then ?

e.g.

http://www.housepricecrash.co.uk/forum/ind...p;#entry2109134

so you reckon IT in the UK is in a fairly healthy state then ? :blink:

IT in corporate UK has always been a mess.

But Oracle and Sun are Silicon Valley companies. An altogether different kettle of fish. Oracle+Sun becomes the first ever single company to be able to compete with the IBM colossus over pretty-much all its main activities (and should stand to out-compete them in many areas).

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