Oracle and BEA

Oracle’s acquisition of BEA came as no great surprise. Carl Icahn (the billionaire who held 13 percent of BEA) gave the distinct impression that he was simply waiting for the right price and Larry Ellison clearly wanted BEA. A deal was always in the offing and a deal was struck.

This is a neat acquisition for Oracle, it fixes a hole in Oracle’s development software stack (Oracle always claimed that its Fusion middleware project was going well, but it there was no actual evidence of that). The BEA acquisition fixes the problem completely. It also delivers quite a few software development jewels into Oracle’s hands, including BEA’s awesomely good Tuxedo transaction processing engine and BEA’s WebLogic and AquaLogic SOA and BPM tools, which have sold well. Another outcome of the acquisition is that Oracle will gain a stronger foothold in many Fortune 500 companies, most of whom were BEA customers.

It’s no bad deal for BEA either. BEA had reached the limits of its growth and had no new direction to offer the industry. So the acquisition makes sense in both directions.

Sun and MySQL

In direct contrast, Sun’s acquisition of MySQL was as surprising as snow in the Sahara. Sun has not previously done well with its software acquisitions – in fact, traditionally, Sun has been one of the places where software goes to die. I’m not so sure that’s the case anymore, now that Jonathan Schwartz has taken the helm. He’s done well so far, having assembled four profitable quarters. Nevertheless, Sun’s share prices is yet to show any vitality. Schwartz has to prove to Wall St that he can find a growth path that fits happily in between IBM, HP and Dell.

Clearly, MySQL is part of Schwartz’s game plan – given that he’s paid $1 billion for it  (a damn sight more than I paid for it). Sun intends to offer new global support for MySQL and, no doubt, expects that the corporate uptake of the product will increase. That’s fine, but is that all that $1 billion buys?

MySQL is almost certainly the most used database in the world. It only claims to be the most used Open Source database, but actually, unless you count the likes of Microsoft Access, it’s the dominant one – well out in front of Oracle or DB2. That’s because it is used to run most web sites (including this one and actually one or two other web sites I’m involved in). In its most recent releases it has also added some of the functionality that more heavy-weight products have (i.e. DB2, Oracle, SQL Server) – which means it can be used outside its prime area of application.

You can look at Sun’s software portfolio in two ways. It has quite a few open source assets, such as OpenSolaris, Glassfish, NetBeans, Star Office and now MySQL. It also has quite a powerful proprietary software stack (with ID management, portal software, middleware, system management, development software and now a database), where MySQL fills a definite hole. However, there’s no obvious big revenue stream likely to emerge from MySQL’s addition to either portfolio. So I guess Schwartz believes that there will be “business synergy”. There may be, but I wont hold my breath.

In any event it is probably mildly bad news for Oracle. With Sun, Oracle was always the preferred database, but that just changed.