Thursday, 21 January 2010 23:42

EU approves Oracle takeover of Sun

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The European Union has given Oracle the go-ahead to consummate its deal with Sun Microsystems.


In a media release, Oracle said that it expected unconditional approval from China and Russia and intended to close the transaction soon.

The company said it would host a full-day event for customers, partners, press and analysts on January 27 at 9am (4am AEST, Jan 28)  at its headquarters in Redwood Shores, California.

The media release said Oracle chief Larry Ellison and executives from Oracle and Sun would outline strategy, product roadmaps, and explain how customers would benefit from having all components - hardware, operating system, database, middleware, and applications - engineered to work together. The event will be broadcast globally.

January 27 was set down last month as the final legal deadline for an EU decision on the deal.

EU competition commissioner Neelie Kroes said in a statement: "I am now satisfied that competition and innovation will be preserved on all the markets concerned.

"Oracle's acquisition of Sun has the potential to revitalise important assets and create new and innovative products."

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The EU statement said its investigation showed "that PostgreSQL was considered by many database users to be a credible alternative to MySQL and could be expected to replace to some extent the competitive force currently exerted by MySQL on the database market."

The investigation also found that the forks of the MySQL code - MariaDB and Drizzle are the two best known but others may exist - could "also develop in future to exercise a competitive constraint on Oracle in a sufficient and timely manner."

Additionally, the investigation took into account "Oracle's pledges to customers, users and developers of MySQL concerning issues such as the continued release of future versions of MySQL under the GPL (General Public Licence) open source licence," the statement said.

"Oracle has already taken action to implement some of its pledges by making binding offers to third parties who currently have a licensing contract for MySQL with Sun to amend contracts. This is likely to allow third parties to continue to develop storage engines to be integrated with MySQL and to extend the functionality of MySQL.

The potential impact of Oracle's acquisition of IP rights of the Java development platform was also examined.

"It found that Oracle's ability to deny its competitors access to important IP rights would be limited by the functioning of the Java Community Process (JCP) which is a participative process for developing and revising Java technology specifications involving numerous other important players in the IT industry, including Oracle's competitors," the statement said.

The investigation concluded that Oracle "would not have the incentives to restrict its competitors' access to the Java IP rights as this would jeopardise the gains derived from broad adoption of the Java platform and therefore the proposed transaction would raise no competition concerns in respect of the licensing of IP rights connected with Java.

"The Commission also examined the potential effects arising from the proposed transaction on the market for middleware and in the 'IT stack', where the merger would strengthen Oracle's presence. It concluded that no competition concerns would arise in these areas in the light of the merged entity's market shares and prevailing competition in the markets."

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The EU decision to grant unconditional approval to Oracle came after an investigation into whether the deal would end up being anti-competitive, given that it also includes MySQL, the most widely used, and best known, open-source database.

In mid-December, Oracle made a number of commitments about the future of MySQL and these pledges appear to have been the factors that swung the EU round to thinking Oracle's way.

Apart from news about the future of MySQL - which became the focus of the whole deal after one of its co-founders, Monty Widenius, started a campaign to "save MySQL" - news of the direction which both OpenSolaris and Java will take under Ellison's ownership will be keenly awaited.

MySQL was founded by Widenius, David Axmark and Allan Larsson in 1995. The company was sold to Sun in 2008 and Widenius joined Sun, only to leave in February last year. In April 2009, Oracle acquired Sun.

The EU launched its investigation in September and initially had to reach a decision by January 19. However, sources indicated to iTWire last month that the last date for a decision had been pushed back to January 27 at Oracle's request.

Widenius has already forked the MySQL code into a project called MariaDB. Btian Aker has forked the MySQl into a lightweight database known as Drizzle.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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