Oracle, Sun and the SMB Market

With the announcement today of the multi-billion dollar acquisition of Sun Microsystems by Oracle, the database market has suddenly been thrown into a state of flux. The earlier rumor was that IBM was interested in buying Sun.

This is especially significant because of the myriad of products owned by the merged company.

Sun has over the years positioned itself as a systems company and has expanded its sphere of influence in that arena. So what is the driving force behind this purchase? Some have argued that is is driven by the new move toward integration. According to CNet, this idea dates back to a concept called Raw Iron. In other words, it is an attempt to move Oracle from the horizontal market space it has been stuck in into a vertical market where Sun has made its mark, kind of. According to Larry Ellison of Oracle:

The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems. Oracle will be the only company that can engineer an integrated system–applications to disk–where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability, and security go up.

Of immediate concern is what the fate of Java is going to be. Also, what happens to MySQL, Open Office, GlassFish, VirtualBox etc? What do we now do with OpenSolaris and Netbeans? Oh, and let’s not forget the venerable SPARC. While Oracle’s database application has long relied on SPARC-based systems, it is not quite clear how the new company will handle these varied products. MySQL has become a major application in the Small to Mid-market environment and powers most of the Linux-based web solutions out there, especially in the web-hosting space. A lot of small business owners who have ventured into writing their own in-house applications also rely heavily on MySQL. As a matter of fact, the software is so popular that it has practically become synonymous with the “M” in LAMP, WAMP and XAMPP (Linux (or Windows or MacOS X), Apache, MySQL, PHP – a self contained website environment that is very handy for testing web applications). The reason this should be a little unsettling is that we all know how outrageously expensive Oracle products are. Oh boy, I can just see the notice threatening us to buy Oracle Solaris (eew, does not even sound right!) and the Oracle 12g or else…Or as Fredric Paul put it:

…if Oracle’s history of acquisitions is any guide — think PeopleSoft and Siebel — before too long Sun will be fully integrated into the Oracle mother ship, and any special culture or products will be phased out. Besides, Sun has been losing money lately, and Oracle is already emphasizing that it plans to make money with its new purchase.

Another concern is that given how vindictive and sometimes petty these big players can be, what if Oracle decides to make Sun’s software products proprietary, and starts charging IBM (a long-time rival) for their use or forcing IBM to start from scratch and develop a similar product?

We’ll definitely keep an eye on this development.