How Oracle Disarmed EU Critics

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By issuing assurances that it would continue to develop and support MySQL, Oracle appears to have put to rest EU regulators' opposition to the deal, issued on Nov. 9. The European Commission released a statement on Dec. 14 saying it is "engaged in constructive discussions with Oracle" about MySQL. The EU has until Jan. 27 to approve the deal, which has already passed regulatory muster in the U.S.

"pretty good concessions"

Many analysts and industry executives focused on Oracle's pledge to spend at least $72 million in the next three years to develop MySQL and on the company's commitment to continue releasing open-source versions of the software with the latest technical enhancements. "Those are pretty good concessions," says Larry Augustin, CEO of software company SugarCRM , a MySQL customer.

Jay Lyman, an analyst at industry consultant the 451 Group, says "Oracle is going a bit further than Sun in giving timelines for continued support of MySQL,"

Jim Zemlin, executive director of the Linux Foundation, says Oracle is "making commitments that [technology vendors] normally wouldn't have to make" when buying another company.

Some open-source software developers had said they feared Oracle could curtail investments in MySQL after buying Sun and thereby eliminating a free or low-priced alternative to commercial database software from Oracle, Microsoft, and IBM (IBM). Most of the estimated 12 million copies of MySQL in use are licensed under the General Public License, which lets companies freely use and modify its code. Most of Sun's estimated $140 million to $150 million in annual MySQL revenue comes from companies that use the GPL version of the database but pay Sun for additional features and technical support.

Oracle's $30 billion takeover binge

About $20 million to $25 million of MySQL's revenues come from several thousand companies, including computer security software vendors Symantec (SYMC) and F5 Networks (FFIV), that pay Sun to include a commercial, non-GPL version of MySQL in their products, according to the executive familiar with MySQL's business. Oracle said it would continue to offer those agreements on the same terms that Sun had purveyed until Dec. 10, 2014.

Shares of Oracle rose 53¢, or 2.3%, to close at 23.31 on Dec. 14. Oracle reports its fiscal second quarter earnings on Dec. 17. Sun Microsystems shares rose 92¢, or 11%, to close at 9.28.

Oracle, which has spent $30 billion to acquire nearly 60 companies since 2005, has prevailed over regulators before, most notably in its takeover of PeopleSoft, which began the company's acquisition binge. The Sun buyout has now dragged on for eight months since it was announced on Apr. 20.

Oracle thought little of the EU's objections. In a Nov. 9 statement, the company said the arguments showed "a profound misunderstanding of both database competition and open-source dynamics." By engaging the EU on its own terms, Oracle may finally be close to sealing its problematic deal.

Ricadela is a writer for BusinessWeek in Silicon Valley.

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