Entries Tagged 'M&A' ↓

451 Take on Red Hat-CentOS

There was a somewhat quiet, cost-free acquisition of sorts in the Linux world earlier this year when Red Hat announced it was joining forces with Red Hat Enterprise Linux community clone CentOS. The move, which effectively brings organization, governance, backing and technology of CentOS under Red Hat’s brim, is interesting for a few reasons.

First, it illustrates the continued presence and power of unpaid community Linux distributions like CentOS. Second, it’s part of the changing Linux market, which is being driven by cloud computing and new types of uses on the rise. Third, it also may be a sign that open source software users and customers are exerting more influence than ever before.

Read the full article at LinuxInsider.

VC funding for Hadoop and NoSQL tops $350m

451 Research has today published a report looking at the funding being invested in Apache Hadoop- and NoSQL database-related vendors. The full report is available to clients, but non-clients can find a snapshot of the report, along with a graphic representation of the recent up-tick in funding, over at our Too Much Information blog.

Red Hat considering NoSQL/Hadoop acquisition

InternetNews.com yesterday published an article based on an interview with Red Hat CEO Jim Whitehurst asking the question “Is Red Hat Interested in the Database Market?”

In truth there was no real need to ask the question, as Whitehurst’s comments made it pretty clear that Red Hat is interested in the database market, and specifically the NoSQL database market.

“When I say I don’t want to be a database company, I’m saying that I don’t want to be a SQL database company,” Whitehurst said.

In case the implications of that statement were not entirely clear, he later added:

“But we would be very interested in a NoSQL type database or Hadoop type thing,” Whitehurst said. “Those are interesting as they represent net new.”

The article adds that Whitehurst would not specifically state whether Red Hat will or will not actually acquire anyone, as is to be expected, but the comments are the clearest indication yet that Red Hat sees value in a potential NoSQL acquisition.

This is something that we have seen for some time, pointing out in May 2010 that “We have consistently noted that the database remains a missing layer in Red Hat’s software stack… and would see advantages in adding an open source NoSQL database to its portfolio to target MySQL users.”

We are by no means the only people to have highlighted the database-shaped hole in Red Hat’s portfolio, but while Red hat has previously shied away from speculation linking it with a relational database vendor (seemingly in order to avoid disrupting its relationship with Oracle) as Jim points out, NoSQL and Hadoop are far more attractive given their growth is based on new projects, rather than the much tougher proposition of competing for incumbent database projects.

So what emerging open source projects might be of interest to Red Hat? Its OpenShift PaaS launched with support for 10gen’s MongoDB and later added support for Couchbase’s Membase, which makes them obvious contenders. We suspect that avoiding overlap and delivering compatibility with Red Hat’s JBoss Enterprise Data Grid technology would be a key part of the decision-making process.

As for Hadoop – Cloudera is the obvious choice but we imagine that any move would be likely to start a bidding war from which Red Hat might not emerge victorious. Hortonworks has only just emerged from Yahoo, of course, but might be an option for a more services-led approach.

Then there is DataStax, which could give Red Hat the opportunity to kill two birds with one stone with its Brisk Hadoop distribution and Apache Cassandra-related software and services.

CouchOne and Membase form Couchbase… and more

See our Too Much Information blog for our immediate reaction to the merger of open source database vendors CouchOne and Membase, as well as some interesting news related to Riak developer Basho Technologies.

Spotlight on Novell’s evolving open source strategy

The 451 Group has recently published a Spotlight report focused on Novell’s strategy as it relates to open source software.

The report is particularly relevant given speculation that private equity firms might be about to acquire the company and break it up, and takes a look at the importance of open source to Novell beyond well-known initiatives such as openSUSE and SUSE Linux Enterprise.

The recent reorganisation of Novell’s assets placed the focus on Intelligent Workload Management (IWM), and brought the Identity and Security, Systems and Resource Management, and Open Platform Solutions divisions together into the Security, Management and Operating Platforms business unit.

While the company is placing less emphasis on the Linux and open source technologies that represented the bulk of the former Open Platform Solutions business unit, open source is no less important to Novell.

In the parlance of The 451 Group’s open source strategy assessment, Novell is expanding on an Open Complement model (using open source to drive interest in its complementary products and services) to add an Open Inside model (building proprietary software products around open source software projects).

The latter is evident in Cloud Manager and Pulse: two new products due for release later this year. Cloud Manager draws on a number of open source projects, such as the OpenESB service bus project, Hibernate for database abstraction, and the Enunciate Web services engine.

Similarly the Pulse real-time collaboration product is based on a combination of closed and open technologies, including Google Wave and Google’s Operational Transformation algorithm, as well as the open source Apache Hadoop data processing framework and Apache Lucene and Solr.

There’s a lot more detail in the report itself, which examines Novell’s Linux-based revenue, the role of Linux within IWM, the company’s community development engagements, and provides more detail on Novell’s Open Complement and Open Inside approaches to OSS, as well as comparison with competitors.

The report is available to existing clients now, while non-clients are, as always, able to apply for trial access via the same link.

Those with an interest in Novell may also be interested in our recent Target IQ report, which examines potential strategic buyers for the company.

Webinar on VC funding for OSS-related vendors

On Thursday, June 3 at 12pm ET we will be holding a webinar to share some of the findings from our recent report ‘Open to Investment, 2010.’ The report is available here, while a summary of the statistics is here.

The webinar will contain analysis of venture funding in open-source-related vendors in 2009 based on The 451 Group’s database of more than 450 funding deals, beginning with the investment in Cygnus Systems from Greylock Partners and August Capital in 1997.

We will also include the results of a snapshot survey of private investors, designed to complement our previous survey of the sentiment of private investors toward open source, and the likely impact of economic conditions on investment in open-source-related vendors.

The webinar will also take in analysis of venture-backed mergers and acquisitions in 2009 involving OSS-related vendors, an overview of the potential impact of current economic conditions on OSS adoption and investment in OSS-related vendors, and analysis of the vendors we believe are most likely to be considering further funding in the next two years.

We hope you can make the session. Registration is now open.

VC funding for OSS-related vendors in 2009

The latest report from the 451 Group’s CAOS (commercial adoption of open source) practice is now available, presenting an analysis of venture capital funding for open source software-related vendors in 2009. Some of the key statistics are as follows:

As you can see, VC funding for OSS-related vendors was down considerably in 2009, as predicted. However, the decline was not actually as steep as I or others had predicted, and figures from the National Venture Capital Association and PricewaterhouseCoopers indicate OSS-related vendors fared better in terms of investment compared to software as a whole.

As well as an overview of the statistics from 2009, the reports also includes an update on the trends seen in investment for open source-related vendors since the investment in Cygnus Systems from Greylock Partners and August Capital in 1997.

There’s much more to the report than statistics, of course. It also includes comparison with funding levels from 1997 to 2008, analysis of venture-backed mergers and acquisitions in 2009 involving OSS-related vendors, as well as analysis of the ten largest OSS-related exits to date and the investors that have profited from them.

Also included is an overview of the potential impact of current economic conditions on OSS adoption and investment in OSS-related vendors, and a list of the 74 vendors we believe are most likely to be considering further funding in the next two years.

The report concludes with a look at the current prospects for OSS-related IPOs and (more likely) M&A in 2010, as well as a preview of venture investments in OSS-related vendors in the first quarter of 2010 (look out for a follow-up post about that in the coming days). Stay tuned also for details of the forthcoming webinar.

The latest CAOS report, Open to Investment, 2010 is available here. 451 Group clients with an interest in OSS and venture capital may also be interested in our recent Sector IQ report: Open source M&A in 2010: Will scarcity of later-stage funding lead to more scrap sales?

SAP as a case study for open source engagement

There was some incredulity expressed yesterday when I suggested that SAP is a great case study on the way in which proprietary companies have engaged with open source.

To be clear, I was not suggesting that SAP is, or should be considered, an open source company, but based on our understanding of SAP’s changing strategy with regards to open source software it represents a good case study on how proprietary companies have learned that it is in their best interests to contribute to open source software projects.

Jay and I had the opportunity yesterday to speak to Claus von Riegen, SAP director of technology standards and open source, and Erwin Tenhumberg, SAP open source program manager. Our formal assessment of the company’s strategy with regards to open source will be published in due course (it is now here), but given the disbelief expressed about SAP’s strategy, I thought it was worth publishing some edited highlights.

  • The company’s strategy is not perfect, and it has made mistakes in the past, not least Shai Agassi’s dismissal of open source as an innovative development model, and the initial release of the SAP DB code under the GNU GPL (as we documented in our November 2008 report – clients only – the company has admitted that it did not properly understand the governance required to create a successful open source project and manage community contributions with that effort).
  • Due to those mistakes, perhaps, SAP has been slow to embrace open source, despite becoming a founding member of the Eclipse Foundation in 2004. That move was motivated by a realization that open source software provided an opportunity to reduce development costs for non-differentiating features and in 2005 the company began documenting the formal processes required for the use of open source software within its internal development projects.
  • That documentation effort is representative of the cautious approach SAP has taken to open source but it has arguably paid off – the processes for the use of open source have subsequently become baked-in to the company’s overall software development and productization process.
  • Another reason that SAP’s progress has been slow is that until 2006 every proposal to make use of open source software had to be approved by the company’s executive board. Clearly that system was unworkable and it has subsequently been replaced by delegation to executives that lead the company’s individual business units.
  • In 2007 SAP began formally contributing to Eclipse projects with the company having realized that it did not make economic sense to maintain its own code patches and modifications and that it stood to gain by proactively contributing to projects. That decision prompted the company to start work on the policies and processes that would be required to enable greater contribution to open source software projects.
  • The processes for expanded contribution were accepted by the executive board in December 2008 and are also now part of the productization process. The impact has been a significant increase in the number of projects that SAP contributes to has jumped from three in late 2008 to more than 25 today.
  • June 2009 saw the company increase its Eclipse membership level from strategic consumer to strategic developer in line with the company’s enhanced contributions. As a result of this increased activity SAP was the third-largest corporate contributor to Eclipse in 2009 in terms of lines of code, with 1.8 million.
  • In October 2009 SAP announced that it was also joining a number of Apache Software Foundation projects, including the Chemistry implementation of the CMIS implementation as well as Maven, VXQuery, Tomcat, OpenEJB and ActiveMQ.
  • Other projects that SAP have contributed to include Ruby on Rails and JRuby, primarily motivated by its use of these technologies in its Business Objects business intelligence software.
  • The company is now routinely seeing product units request open source use and contribution approval at the same time, indicating that the benefits of contribution have been widely accepted.

There is a lot more to SAP’s open source story than that – see our formal report for details on the due diligence checks performed by SAP on its code use, as well as plans to encourage more open source development from the members of its SAP Developer Network for example (I’ll add the link when the report is available) – but there is a clear journey that SAP has been on that continues to drive it towards even greater use of, and contribution to, open source software. Progress has arguably been slow, but the previous barriers to contribution have been lowered and the diligence that SAP has shown in putting processes and policies in place have put it in a good position to be able to benefit from greater involvement with open source projects.

Software patents

Of course some issues remain. On a related issue, one of the most significant for free and open source advocates is the company’s attitude towards software patents. A good explanation as to why this is the case is provided by Glyn Moody.

I asked Claus and Erwin for their perspective on SAP’s stance on software patents and how that impacted the perception of SAP. Part of the response was the expected position that as SAP exists in a world where there are software patents it has no choice but to engage in patenting software itself if it is to retain a strong position against competitors. The other, with specific reference to open source, was as follows:

    “SAP actually is a big proponent of strong and concise IPR licensing regimes for all standards and open source initiatives we participate in. Whatever claims of patents and patent applications that essentially need to be infringed to implement a standard or use an open source component should always be licensed in a reasonable and non-discriminatory manner by the individuals and organizations that have contributed to the project (obviously, in open source projects RAND means royalty-free). SAP does participate in open source projects particularly in order to drive adoption of a certain technology. There may be SAP patents in that very domain and they may be essential, but we require ourselves to freely license those patents to everybody. But we expect the same from any other project participant. And that’s actually why we prefer governance models like the one from the Eclipse Foundation (that also comprises contribution analyses in order to minimize unintentional copyright infringements).”

UPDATE – Glyn Moody has predictably and helpfully obliged with his analysis of that statement, here.

A guide to The 451 Group’s open source software coverage

Regular visitors to the 451 CAOS Theory blog will be well aware of The 451 Group’s CAOS (Commercial Adoption of Open Source) research service and our CAOS long-form reports.

They are probably less aware of the open source coverage that The 451 Group provides on a day-to-day and week-to-week basis, however, and I thought it would be worthwhile to provide some examples of The 451 Group’s ongoing open source coverage by highlighting a few recent reports.

The company’s core services are 451 Market Insight Service, which delivers daily insight into emerging enterprise IT markets, and 451 TechDealmaker, a forward-looking weekly analysis service focused on M&A activity within the enterprise IT business.

Here’s some examples of how our coverage fits in to those two services. Needless to say, these reports are only available to clients, although you can apply for trial access. Vendors – open source or otherwise – do not have to be clients in order to be covered by our analysts.

451 Market Insight Service
The 451’s CAOS analysts – Jay and I – are responsible for much of the coverage of open source specialist vendors. Recent examples include:

Meanwhile The 451 Group’s team of analysts also cover open source related vendors in their respective coverage areas, often in conjunction with CAOS analysts. For example:

Additionally, we also provide reports assessing the strategies of proprietary/mixed source vendors towards open source. Examples include:

In addition to our vendor-centric MIS output, open source also regularly makes an appearance in our reports assessing wider industry trends. For example:

451 TechDealmaker
451 Group analysts follow open source-related M&A in their coverage areas, again often working with the CAOS analsyst. Examples include:

While we also provide reports assessing the prospects of potential acquirers and targets alike. For example:

And again, open source makes an appearance in our reports assessing wider industry trends. For example:

For those with an interest in M&A it is also worth mentioning is 451 M&A KnowledgeBase – the company’s merger and acquisition database, which contains details of all M&A deals tracked by The 451 Group, and offers the ability to filter search results to contain deals that are themed “open source”.

Don’t fear the reaper. Why FOSS should not fear M&A by proprietary vendors

A couple of posts have been published recently worrying about the impact of more open source specialist vendors being acquired by proprietary vendors.

This is an issue that crops up occasionally. Usually when a major acquisition has been announced, and the current questioning seems to be driven by the ongoing saga of Oracle-Sun-MySQL, as well as the rumoured purchase of Zimbra by VMware.

While fear of the unknown is understandable, to my mind the concern about open source specialists being acquired by proprietary vendors is driven by parochialism and misplaced assumptions about the rate of acquisitions and the acquiring company’s intentions.

For a start the statistics suggest that acquisitions involving open source vendors have declined in recent years (contrary to our expectations to be honest). According to our preliminary figures there were 24 M&A deals involving open source vendors in 2009, compared to 29 in 2008 and 35 in 2007. Dave Rosenberg makes the case that we have seen less open source M&A than we might have expected.

There is always the fear, however, that a proprietary vendor could acquire an open source rival in order to shut it down. This is a theory we at The 451 Group investigated last year via a TechDealMaker service report asking “Could an open source project survive a hostile acquisition?” (451 clients can access the report here).

Looking at the history of M&A involving open source vendors we were unable to identify a single example of a proprietary vendor acquiring an open source project in order to kill it off.

Another significant fear involving open source acquisitions is that the acquiring company will suddenly change the licensing and/or pricing in order to generate revenue from users open source of the open source project.

To me this is a fear based on a false assumption that the only way to monetize open source is directly. If we look at the strategies used by proprietary vendors to generate revenue from open source (as we did oin our Market Insight Service report “How third parties generate revenue from open source“, which was itself adapted from our Open Source is Not a Business Model CAOS report) we find that they are more likely to do so indirectly via complementary products and services.

In contrast open source specialist vendors have no choice but to attempt to monetize the open source software directly, either through support or proprietary licensed add-ons, and we have observed that this creates an inherent tension.

There is also a false assumption that open source specialist vendors are more committed to an open source “philosophy”. Some are, to be sure, but some simply see open source as a means to an end – treating it as a license tactic that disrupts competitors and expends potential adoption. There is nothing inherently wrong with that, but it does mean that for a great many open source “projects” the idea of the development community is a myth.

As previously discussed, Matt Asay noted last year that “vendors that have proprietary selling points elsewhere don’t need to control open-source code.”

In fact, I would suggest that vendors with proprietary selling points elsewhere have more to gain from releasing control of an open source project. Dirk Reihle explained the financial benefits this week with his Economic Case for Open Source Foundations, including sharing development expenses, increasing profits per sale, increases sales, and expanding the addressable market.

The fact that proprietary vendors have proprietary selling points elsewhere means that they are also in a better financial position to trade control for community via a foundational approach, in contrast to open source specialists.

There may well be situations where the acquisition of open source specialists by proprietary vendors might give cause for concern, but I believe it is wrong to assume that the impact will be negative. While many open source specialists might have something to fear regarding increased M&A activity, in the broader context open source software has more potentially to gain from the increased involvement of proprietary vendors than it has to lose.

Everything you always wanted to know about MySQL but were afraid to ask – part three

Since the European Commission announced it was opening an in-depth investigation into the proposed takeover of Sun Microsystems by Oracle with a focus on MySQL there has been no shortage of opinion written about Oracle’s impending ownership of MySQL and its impact on MySQL users and commercial partners, as well as MySQL’s business model, dual licensing and the GPL.

In order to try and bring some order to the conversation, we have brought together some of the most referenced blog posts and news stories in chronological order.

Part one took us from the announcement of the EC’s in-depth investigation up to the eve of the communication of the EC’s Statement of Objections.

Part two took us from there to the eve of the announcement of Oracle’s concessions.

We will continue to update part three, below, until either the acquisition or the EC’s investigation closes.


December 14
: Oracle – Oracle Makes Commitments to Customers, Developers and Users of MySQL
“Oracle has engaged in constructive discussions with the European Commission regarding the concerns expressed by the Commission about the Oracle/Sun Microsystems transaction, and in particular the maintenance of MySQL as a competitive force in the database market. In order further to reassure the Commission, Oracle hereby publicly commits to the following…”

December 14: Commission welcomes Oracle’s MySQL announcement
“Today’s announcement by Oracle of a series of undertakings to customers, developers and users of MySQL is an important new element to be taken into account in the ongoing proceedings. In particular, Oracle’s binding contractual undertakings to storage engine vendors regarding copyright non-assertion and the extension over a period of up to 5 years of the terms and conditions of existing commercial licenses are significant new facts. In this context, Competition Commissioner Neelie Kroes recalls and confirms her statement of 9 December 2009 that she is optimistic that the case will have a satisfactory outcome.”

December 14: Jeremy Zawodny – Trust Oracle? Why?
“Back a few years ago when Oracle dismissing MySQL in public while working hard against it in private, I realized that they were simply trying everything they could to protect their crowned jewels: public denials and classic FUD paired with hush-hugh backroom deals. Nobody has managed to explain, in even a mildly convincing way, what has changed since then. Why should we suddenly trust Oracle? Their crowned jewels are still threatened by MySQL.”

December 14: BusinessWeek – How Oracle Disarmed EU Critics
“The most influential provision in assuaging regulators’ concerns about the proposed acquisition may be one of the least noticed. Amid Oracle’s commitments was a pledge to let other technology vendors continue licensing MySQL for use in their products for another five years.”

December 14: Paul McCullogh – Monty’s appeal is selfless!
“If Oracle slows and closes up development, rejects community contributions and creates a commercial version of MySQL, then Monty Program’s MariaDB fork will become very popular, very quickly. Which would translate into income for Monty Program Ab as customers come to his company for additions, features and bug fixes that they need to secure there own production. What Monty is concerned about is the commercial vendors of MySQL (one of which Monty Program is not).”

December 15: Henrik Ingo – We scared Oracle a little, but their promises for MySQL are mostly an insult to the Commission
“5 years, or any amount of years, as a limit to such assurances is not satisfactory and customers and partners would immediately loose interest in MySQL with this promise. The only workable solution has to be perpetual and irrevocable promises.”

December 15: Stephen O’Grady – Oracle, MySQL and the EU: The Endgame Q&A
“Remember June of 2008? Oracle hiked its prices by 15-20% with no detectible impact to its volume. If MySQL was a real, substantial alternative, wouldn’t we have seen wholesale migrations away from Oracle to MySQL? That we didn’t, and continue not to, tells me they’re two different markets.”

December 16: Sheeri Cabral – A MySQL Community Member Opinion of Oracle Buying Sun
“The FUD about Oracle slowing development MySQL are not valid, and not true. The motivations behind those spreading this FUD are monetary and selfish. As a community member, I have seen Oracle put plenty of time, money and effort into developing InnoDB. I look forward to even more of Oracle’s resources being used to develop MySQL further.”

December 16: Monty Widenius – Oracle gives only empty promises for MySQL
“Oracle is trying to win the case through press releases and public pressure instead of really eliminating the European Commission’s concerns. They show no respect for the European authorities or how we do things here. Oracle just want to dictate their own terms and expect us to accept them on face value.”

December 17: AP – Oracle expects EU to approve Sun deal next month
“Oracle’s president, Safra Catz, said in a statement Thursday that the company now expects that European regulators will “unconditionally” approve the Sun acquisition in January.”

December 28: Monty Widenius – Help keep the Internet free
Monty Widenius launches his petition to help save MySQL by claiming (amongst other things) that “It’s not in the Internet users interest that one key piece of the net would be owned by an entity that has more to gain by severely limiting and in the long run even killing it as an open source product than by keeping it alive.”

December 29: Mark Callaghan – Save MySQL, save the world
“MPAB continues to drive away potential supporters with the tone of their messages, the inclusion of pointless assertions, and the complete lack of references.”

December 29: Sheeri Cabral – Save MySQL by letting Oracle keep it GPL
“I cannot say whether or not Oracle would kill MySQL. However, I have already stated I believe Oracle will not kill MySQL. This is based on the fact that Oracle has had the chance to kill MySQL for several years, by making InnoDB proprietary, and has not.”

January 3: David Nielsen – Why “helping MySQL” reflects poorly on us all
“This has nothing to do with the software’s freedom status and given the FSF’s behavior as well as argumentation throughout recent years, the entirety of the inherent freedoms remain intact even when forking the existing codebase, meaning that this is entirely about the right to make money from proprietary use cases of the code.”

January 4: Reuters – MySQL founder mobilizes 14,000 against Oracle-Sun
“Michael Widenius, the creator of the MySQL database and a potential stumbling block for Oracle in its takeover of Sun, handed 14,000 signatures opposing the deal to regulators in Europe, China and Russia.”

January 11: CAOS Theory – Save MySQL would not spare open source M&A
“I believe that separating out open source components, parts, projects and subsidiaries from vendors could certainly serve to dull the shine of open source software assets and vendors amid M&A valuations, prospects and strategy.”

January 15: CBR – MySQL co-founder doubts Oracle support
“David Axmark has told CBR that he believes there is ‘no real reason’ for Oracle to support the open source database application… Axmark added, however, that it is unlikely Oracle will kill off the database and that current MySQL customers should not be too badly affected by the takeover… Axmark also believes that aiming MySQL at a market where Oracle’s existing database applications do not operate will mean that the two can coexist.”

January 17: Marc Fleury – Save MySQL?
“This is making OSS acquisitions look very dangerous and dicey. JBoss is finally making a ton of money for Red Hat (>100MUSD/yr) but after 3 years, a few false starts and fumbles. It was a steep learning curve on both sides. But, so far the MySQL situation is a disgrace and just looks like a huge mistake. Hopefully the VMWare crew does a better and more discreet job of successfully integrating an OSS company.”

January 17: MySQL founder turns to China, Russia to halt Oracle
“Michael Widenius, the creator of the MySQL database, said he is turning his vocal campaign against Oracle’s planned takeover of Sun Microsystems to China and Russia because the European Commission appears set to clear the deal.”

January 20: Oracle – Larry Ellison to Unveil Oracle + Sun Strategy at Company Event on January 27th
“Oracle CEO Larry Ellison, along with executives from Oracle and Sun, will outline the strategy for the combined companies, product roadmaps, and how customers will benefit from having all components – hardware, operating system, database, middleware, and applications – engineered to work together.”

January 21: European Commission – Commission clears Oracle’s proposed acquisition of Sun Microsystems
“Competition Commissioner Neelie Kroes said: “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.””

EC investigation of Oracle-Sun enters the endgame

Oracle’s proposed acquisition of Sun Microsystems looks set for approval by the European Commission after the competition commission welcomed commitments from Oracle related to the future development and licensing of the open source MySQL database.

The EC has until January 27, 2010, to reach a final decision however it appears that significant progress has been made following hearings in Brussels last week where Oracle made its case for approving the acquisition and opponents including SAP, Microsoft and Monty Program AB argued against the proposed acquisition.

Oracle has published a list of ten commitments that it is prepared to make to assuage the EC’s concerns over the future of MySQL, which were quickly and enthusiastically welcomed by the European Commission.

Oracle’s commitments

Oracle’s list of ten commitments related to the future licensing and commercial arrangements for MySQL, with a specific focus on the developers of storage engines that plug in to the core MySQL database enabling it to be used for specific application purposes, such as data warehousing, transactional applications, and clustered environments. Oracle stated that the commitments would continue for five years after the completion of the acquisition.

Oracle committed to the ongoing availability of storage engine application programming interfaces (APIs) as well as a promise to change Sun’s current copyright policy to ensure that storage engine providers would not require a commercial license to implement the APIs and would not be required to release their storage engines under the GNU General Public License. Oracle also promised that storage engine providers that currently have an OEM license with Sun to use MySQL alongside proprietary storage engines would be able to extend those agreements on the same terms until December 10, 2014.

With regards to open source licensing, Oracle also committed to continue releasing future versions of the MySQL Community Edition under the GNU GPL, and that new releases of the Community Edition would coincide with new releases of the Enterprise Edition product, for which proprietary licenses and subscription support are available.

Oracle also promised that customers will not be required to purchase support subscriptions from Oracle in order to obtain a proprietary license and that users that do opt to pay for support will have a choice of annual or muti-year support subscriptions

Oracle also repeated its promise to increase research and development spending on MySQL, detailing that in each of the next three years it will spend more that the $24m Sun spent on developing MySQL in its most recent financial year.

The company also stated that it would create two advisory boards – one representing end users and another representing storage engine vendors – to provide guidance on development priorities and other issues. Both will be created within 18 months of the acquisition closing. Finally Oracle committed to maintaining and updating the MySQL Reference Manual at no charge.

Commission’s response

The European competition commission welcomed the commitments, noting that the promises regarding copyright non-assertion and the extension of existing commercial licenses are significant new facts to be taken into consideration.

In the context of the commitments Competition Commissioner Neelie Kroes repeated her previous statement indicating optimism that an agreement could be reached that would allow the acquisition to proceed in a manner that would not have an adverse impact on competition in the European database market.

Last-minute intervention?

Although the commission responded warmly to Oracle’s commitments, the same cannot be said for Oracle’s opponents, especially Monty Program AB, the company set up by MySQL creator Monty Widenius to provide development and support for the MariaDB fork of the MySQL code base. Widenius has initiated a last-minute campaign to highlight user concerns over the future of MySQL, encouraging users to email the commission detailing their their about Oracle’s potential to raise prices and discourage MySQL developments that would enable it to better compete with the Oracle Database.

According to a recent survey of open source users conducted by The 451 Group, 14.4% of current MySQL users are less likely to use the open source database if it is acquired by Oracle, compared to 5.6% who are more likely to use MySQL if it is acquired by Oracle. The majority of users, 63.9%, will continue to use MySQL. That survey, and Widenius’s call to arms, came before the publication of Oracle’s commitments, however.

The 451 take

We did not expect Oracle to offer any concessions that would see it having to divest MySQL. The commitments that Oracle has made appear to strike a balance that protects the current business interests of MySQL storage engine providers and licensees without forcing Oracle to give up any rights to the database product. The EC’s swift and enthusiastic response indicates that the commitments settle many of its concerns about the future of MySQL. Oracle’s acquisition of Sun is not quite a done deal – we suspect there may still be room for negotiation regarding timescales – but it would appear that a major regulatory hurdle has just been lowered significantly. We now expect the proposed acquisition to be approved sooner rather than later. Oracle can be expected to invest in MySQL and position it as an alternative to Microsoft’s SQL Server at the low-end of the database market and for desktop and web applications while continuing to use its Oracle Database product to compete with SQL Server for high end enterprise applications. Do not expect Microsoft to take that competitive threat lying down. Even assuming that the EC’s investigation is near to completion, the controversy surrounding MySQL is likely to be far from over.

The case against the case against Oracle-MySQL

Matt Asay is right, in my opinion, to point out the inherent bias in the case Monty Widenius et al have made against Oracle’s potential ownership of MySQL. I would go further, however, in stating that the case being made against Oracle is flawed by the fact that it is so self-serving. For instance:

  • I previously noted that the Widenius/Mueller case against Oracle owning Sun/MySQL is entirely dependent on the theory that Oracle will not invest in the ongoing development of MySQL, which is something it has publicly committed to doing.
  • The case against Oracle owning Sun is also based on the theory that the only way for a fork of MySQL to generate revenue is via dual licensing. This is clearly not the case. It might be true that the only way for a fork of MySQL to generate the level of revenue required by Monty Program is through dual licensing, but that is not the same thing.
    .
    It might also be true to say that the only way for a fork of MySQL to generate the level of revenue required to be self-sustaining is though dual licensing, but that statement is dependent on the theory that Oracle will not invest in the ongoing development of MySQL, which is something it has publicly committed to doing.

    The launch of Amazon’s Relational Database Service clearly proved that it is possible to generate revenue from MySQL as a third party without dual licensing. RDS was dismissed by Florian Mueller, in an “information kit” sent to analysts/journalists as being “not a real ‘fork'”. This may be true, but it does not prove that RDS is not a viable way for a third party to generate revenue from MySQL, it just proves that it is not the way Monty Program chooses to generate revenue from MySQL.

  • The case against Oracle owning MySQL is also dependent on the theory that MySQL has progressed to the point where it is a viable “option to replace an existing Oracle installation”. This is wishful thinking at best, and deliberately misleading at worst.
    .
    Ask someone who uses both Oracle and MySQL – Mark Callaghan for example – and they will tell you that despite the advances made by MySQL the two are not directly comparable. MySQL has undeniably been deployed to replace Oracle Database installations, but invariably this is due to the fact that the Oracle Database was not the right tool for the job in the first place.
    .
    Too often IT users use a sledgehammer when a hammer will do, and the growth of MySQL was driven by the fact that it was the right tool for web-facing PHP applications. As we previously noted, Oracle executives once dismissed MySQL as a Toyota compared to its 747. It was a comparison that MySQL used to its advantage. Maybe today MySQL has grown some wings, but it is still more suitable for short-haul than trans-Atlantic flights.

    Perhaps this is missing the point, though. Perhaps without Oracle’s ownership MySQL could become a true competitor to Oracle. The “Project Peter” presentation suggests that Sun thought it could. I am not convinced this was anything other than an internal exercise.

    The only time MySQL executives ever made any statements about competing directly with Oracle, to my knowledge, was during the announcement that MySQL was being acquired by Sun, and senior executives later admitted that was the result of getting carried away. MySQL is fundamentally not designed to to do what Oracle Database is designed to do. If you wanted to create a database to compete directly with Oracle you’d be better off starting afresh than building on top of MySQL.

  • The case against Oracle owning MySQL is also reliant on the idea that “the only proposed remedy through which Oracle could ensure that MySQL continues to be a significant competitive force in the database would be a commitment to divest all MySQL assets to a suitable third party” (again from Mueller’s information kit). However, as Groklaw has pointed out, Monty et al previously suggested to the EU Commission in a questionnaire that the license on MySQL should be changed to the Apache License (Mueller has subsequently denied ever suggesting a license change, prompting this response from Groklaw).
    .
    Additionally, our recent survey of open source users demonstrates that there would be limited market acceptance for the forced divestiture of MySQL to another vendor. Just 4.3% of all respondents and 3.9% of MySQL users thought that Oracle should be forced to sell it to another vendor. This is not about user interests, it is about the interests of Monty Program AB.
  • Last, but by no means least, the case against Oracle owning MySQL is flawed in its reliance on FUD and ad hominem attacks. As Groklaw points out, the case was laid out by alleging that the GPL has the potential to infect proprietary software.
    .
    Things went from bad to worse with the response to Eben Moglen’s view on the case. Mueller wrote that “Compared to Richard Stallman [Moglen is} very unimportant in a GPL context”. Not only that but that when Mueller met Moglen in 2004 Moglen “was primarily interested in obtaining funding (at the time from MySQL, on whose behalf I met with him) for some initiatives of his (at the time “patent busting”, a pretty pointless approach that never got anywhere but some lawyers made some money with it)”.

    Mueller recently wrote (in another email to analysts/journalists) that “lobbying is typically what companies do when they can’t win on the substance of a case”. I hate to think what position you have to be in to decide that bad-mouthing one of the most respected lawyers in free and open source software is going to get you somewhere.

    It would be bad enough if it were only Mueller. Recent Henrik Ingo of the Open Database Alliance stated that Mogen “is working for Oracle here” and “is arguing Oracle’s case best he can”.

    This is at best misleading and at worst (taken in consideration alongside Florian Mueller’s statement about Moglen) a slur on Moglen’s integrity. Moglen’s opinion paper clearly states that it was submitted “at the invitation of Oracle’s counsel, but I am not receiving any compensation, fee or reward for so doing.”

  • UPDATE: Finally, we have Monty Widenius’s plea to his fellow MySQL users/developers in which he criticizes Oracle for involving customers in a competition hearing (and there I was thinking it was all about customers) and takes Oracle to task for not promising a number of things. Many of these he has a point about, but then when did MySQL AB or Sun make promises about the following?
    .
    – To keep (all of) MySQL under an open source license
    – Not to add closed source parts, modules or required tools.
    – To not raise MySQL license or MySQL support prices
    – To release new MySQL versions in a regular and timely manner.
    – To continue with dual licensing and always provide affordable commercial licenses to MySQL to those who needs them (to storage vendors and application vendors) or provide MySQL under a more permissive license
    – To develop MySQL as an Open Source project
    – To actively work with the community
    – Apply submitted patches in a timely manner
  • AND ANOTHER THING: The case also relies on the theory that MySQL acts as a price constraint on Oracle Database. However, as Stephen O’Grady points out: “Remember June of 2008? Oracle hiked its prices by 15-20% with no detectible impact to its volume. If MySQL was a real, substantial alternative, wouldn’t we have seen wholesale migrations away from Oracle to MySQL? That we didn’t, and continue not to, tells me they’re two different markets.” Good point well made.

451 Group survey highlights user concerns over Oracle’s proposed ownership of MySQL

Everyone seems to have an opinion about whether Oracle should be allowed to acquire the MySQL database along with Sun Microsystems including former MySQL/Sun executives, developers, rivals, partners, analysts, journalists, the Department of Justice and even US Senators. What do open source software users think?

We asked the members of the “CAOS user community”* to tell what they thought of the proposed deal, as well as share some details on current database usage. The results have been published in the form of a 451 Group report (subscribers only) but here’s some of the headline figures:

  • The use of MySQL is expected to decline from 82.1% of the 347 respondents today as 78.7% expect to be using it in 2011, declining to 72.3% 2014.
  • The proposed acquisition of MySQL by Oracle has a part to play in that decline. 15% of all open source users and 14.4% of current MySQL users responded that they would be less likely to use MySQL if it is acquired by Oracle.
  • MariaDB usage is expected to rise from zero usage today to 3.5% of all users in 2011 and 3.7% in 2014
  • The majority – 57.9% of all users and 63.9% of MySQL users – indicated that they would continue to use MySQL where appropriate, however.
  • The negative attitude towards Oracle is specific to concerns over its future plans for MySQL, however. Oracle Database usage is expected to rise from 19.3% today to 19.6% in 2011 and 21.6% in 2014.
  • PostgreSQL usage is also expected to grow, from 27.1% of all users today to 30.5% in 2011, remaining at the same level in 2014.
  • 6.3% of all open source users and 5.6% of MySQL users are more likely to use MySQL if it is acquired by Oracle.
  • 17.6% of all respondents and 16.8% of MySQL users stated that they thought that Oracle should be allowed to keep MySQL.
  • 32.6% of all respondents and 34.0% of MySQL users stated that Oracle should hand the database to an independent foundation to continue its development.
  • Just 4.3% of all respondents and 3.9% of MySQL users thought that Oracle should be forced to sell it to another vendor, which is the preferred option of the most vocal opponents to Oracle’s impending ownership of MySQL
  • In comparison 13.8% of all respondents and 12.3% of MySQL users said they did not care either what happened to MySQL.

Further survey results, analysis and details on the respondents are available in the 451 Group’s report.

*The survey was completed by 347 open source software users who are among the 1,000-plus members of the “CAOS open source user community”. It includes open source software users from every geography, industry and business size. Just below 16% of the CAOS open source user community claim to be nonpaying open source users, as opposed to customers of open source support services and related products. Users do not have to be 451 Group customers to be part of the community.

Oracle-Sun: Statements and observations

I’ve been trying to dig a bit deeper into the European Commission’s investigation of Oracle’s proposed acquisition of Sun Microsystems, to look beyond the received wisdom about the EC’s concerns about the deal.

We know they revolve around the open source MySQL database, the European Commission has said that much. But the Statement of Objections weighs in at 155 pages, and even those that have read it admit to being confused by it. Meanwhile some of the most vocal parties in the public debate have vested interests in encouraging opinions for or against the deal.

Without knowing precisely what the European Commission wants to achieve it is impossible to come to any conclusions about the investigation. However, here are a few statements and observations:

  • Anyone who claims to completely understand the European Competition Commission’s concerns with regards to Oracle-Sun either works for the European Competition Commission or is lying.
  • The EC is evidently concerned about the ongoing availability of the GPL-licensed MySQL code.
  • However, there are also concerns about the contracts related to non-GPL licenses used to make the code available to software vendors for use with proprietary software.
  • The public debate about the Oracle-Sun deal has focused disproportionately on the impact of the deal on forks of the open source MySQL code base.
  • The impact of the proposed deal on competition is just as likely to revolve around the proprietary contracts.
  • Statements from MontyWidenius/Florian Mueller objecting to the proposed merger and the European Commission’s Statement of Objections against the merger are *not* the same thing.
  • The Widenius/Mueller case against Oracle owning Sun/MySQL is entirely dependent on the theory that Oracle will not invest in the ongoing development of MySQL, which is something it has publicly committed to doing.
  • There are forces at work that are not immediately obvious. You can probably guess what they are though.

A formal report covering the latest twists and turns in the proposed acquisition is available to 451 Group clients.

Everything you always wanted to know about MySQL but were afraid to ask – part two

Since the European Commission announced it was opening an in-depth investigation into the proposed takeover of Sun Microsystems by Oracle with a focus on MySQL there has been no shortage of opinion written about Oracle’s impending ownership of MySQL and its impact on MySQL users and commercial partners, as well as MySQL’s business model, dual licensing and the GPL.

In order to try and bring some order to the conversation, we have brought together some of the most referenced blog posts and news stories in chronological order.

Part one took us from the announcement of the EC’s in-depth investigation up to the eve of the communication of the EC’s Statement of Objections.

Part two, below, takes us from there to the eve of the announcement of Oracle’s concessions.

We will continue to update part three until either the acquisition or the EC’s investigation closes.

November 9
: Statement from Sun on EC’s Statement of Objections
“The Statement of Objections sets out the Commission’s preliminary assessment regarding, and is limited to, the combination of Sun’s open source MySQL database product with Oracle’s enterprise database products and its potential negative effects on competition in the market for database products.”

November 9: Statement from Oracle on EC’s Statement of Objections
“The Commission’s Statement of Objections reveals a profound misunderstanding of both database competition and open source dynamics… Oracle plans to vigorously oppose the Commission’s Statement of Objections as the evidence against the Commission’s position is overwhelming. Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction.”

November 9: Statement from the US DoJ on EC’s Statement of Objections
“After conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department’s Antitrust Division concluded that the merger is unlikely to be anticompetitive… At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction.”

November 10: BusinessWeek quotes EC spokesperson on Statement of Objections
[EU spokesman Jonathan] “Todd said Tuesday that Oracle would become the exclusive holder of the copyright and trademark for MySQL code “which means that despite the fact that MySQL is open source, it could be very difficult for a competitor using MySQL code to sufficiently replace the competitive constraint” that MySQL places on database rivals. The commission is concerned that Oracle could refuse to license MySQL to some companies or for some uses in order to favor its own software. “Just because MySQL is open source, does not mean that if you want to apply it in the commercial context, that you can do what you like with it,” Todd said.”

November 10
: All Things D – Morgan Stanley to EU: Whatever Larry Wants, Larry Gets, and Sun Is No Exception
“Based on our diligence, we believe the EC is likely to approve the deal with no remedies or remedies pertaining to MySQL’s licensing,” the research house said in a note to clients today. “It is highly unlikely that Oracle restructures the deal (e.g. spins MySQL) or walks away.”

November 11: eWeek – EC Schedules Sun Oracle Hearing For 25 November
“The EC and Competition Commissioner Neelie Kroes scheduled the hearing for Nov. 25 at the EC offices in Brussels, a source with knowledge of the transaction revealed.”

November 11: IOUG Supports Oracle Acquisition of Sun
“We anticipate that Oracle will continue to foster innovation and openness with MySQL following the acquisition and not hinder competition. Oracle has acquired numerous other companies in the past and has built on the strength of each to foster its growth. Oracle has previously acquired databases and has continued to support and enhance them, while providing critical business support.”

November 11: MySQL paying customer Osma Ahvenlampi – MySQL – could we please move on already?
“I’m a customer of MySQL, and I don’t really savor the idea of becoming a customer of Oracle. Even so, I’d much rather see Oracle own it, than leave it straggling, let alone see this process drag on and on. This is helping no one.”

November 11
: MySQL and Wikipedia developer Domas Mituzas objects to the Statement of Objections.
“In my opinion, if you are right now in the camp of supporting objections, it is not because you’re seeing a lot now, it is mostly because you didn’t see anything before.”

November 11: ComputerWorld – SAP: Outreach to Oracle about Java, not help with Sun deal
“SAP AG said today it contacted Oracle and its CEO, Larry Ellison, in recent months over concerns about the future of the Java programming language and competition in the database market, not to offer help facilitating Oracle’s purchase of Sun Microsystems, which is being held up by a European antitrust review.”

November 12: Bloomberg – EU’s Kroes is ‘optimistic’ about Oracle settlement
“Let’s be optimistic, and let’s find out if they could take us to a point that we say, ‘OK, here we can take the result as a satisfying result for fair competition,’ ” Kroes told journalists in Brussels when asked whether a sale of MySQL would resolve competition concerns.”

November 12: Neil McAllister – Who is trying to sabotage the Oracle/Sun merger?
“If… you mistrust Oracle so much that you honestly believe it would kill the proverbial golden goose just out of spite, so be it. But when you root against Oracle, make sure you know just what — and who — you’re rooting for. Open source isn’t the whole story.”

November 12: The Economist – Merger interruptus
“It is hard to find anyone in the technology business who is prepared to argue that MySQL and Oracle really compete—or ever will. The commission is on firmer ground when it argues that the way MySQL is licensed would allow Oracle some control over commercial use of the program. Although MySQL and its underlying recipe are available free, any added code built around the open-source product must also be made open source. Most firms that develop products on top of MySQL prefer to buy a commercial licence that does not come with this obligation. This they obtain from the copyright holder, which would be Oracle. Because of the success of this “dual-licensing” set-up, a strong alternative to MySQL is unlikely to emerge.”

November 13: Internetnews.com – Should Oracle Dump Europe Before MySQL?
“When a regulator says to a company ‘prove to me that you are not hurting competition’ when there is virtually no concrete evidence to prove they are, then this no longer feels like an evidence-based proceeding, it feels like a conclusion-based proceeding.”

November 20
: Reuters – EU extends review of Oracle plan to buy Sun
“”Oracle requested the extension in order to have the opportunity to further develop its arguments in response to the Commission’s concerns,” the Commission said. The Commission… pushed back its deadline to Jan. 27 from Jan. 19.”

November 23: Bloomberg – Oracle Purchase of Sun’s MySQL May Remove Competitor, EU Says
““Oracle has strong incentives to adopt a commercial and technology strategy for MySQL which prevents it from cannibalizing Oracle’s significant revenues from proprietary offerings,” the Brussels-based commission said in the so-called statement of objections.”

November 24: InformationWeek – Senators Urge EU To Finish Oracle Sun Probe
“Sun Microsystems’ financial position has become more precarious and the commission’s inquiry has continued.”

November 25: Reuters – EU hearing on Oracle, Sun deal on Dec 10
“Oracle will present to European Union regulators on Dec. 10 its case for buying computer maker Sun Microsystems, two people with knowledge of the matter said.”

November 29: Brian Gentile – Stop the Delay of Oracle’s Acquisition of Sun
“Done properly, Oracle’s acquisition of Sun should serve the market, community and customers even better. The company will be put in a position where it can play an important leadership role in helping its global peers more surely understand the open source model.”

December 1: Fabrizio Capobianco – Competition in Free/Libre Open Source software
“We believe the evidence shows that Oracle’s stewardship of MySQL will enhance the marketplace and offer greater choice and more effective competition for established proprietary database providers.”

December 2: Mark Callaghan – Oracle RDBMS != MySQL RDBMS.
“The Oracle and MySQL RDBMS are very different products. This makes me happy. I used to work on the Oracle RDBMS. It has a lot of features that do amazing things. Unfortunately, this also makes it extremely hard to modify. MySQL doesn’t have as many features. This makes it easier to modify.”

December 3: Reuters – Activist lawyer sees flaw in Oracle-Sun report
“Eben Moglen said that he has found errors in a document from EU regulators that outlines their concerns about clearing the deal… “The issues raised (by the commission) concerning the GPLv2
status of the MySQL code base do not warrant a conclusion that this transaction threatens significant anti-competitive consequences,” Moglen told EU regulators.”

December 4: New York Post – Oracle leader blinks
“Ellison is now willing to create a separate entity within a combined Oracle-Sun that houses Sun’s MySQL open database software business in order to get the deal completed before a hearing Thursday.”

December 4: Reuters – Oracle says NY Post report on Sun is false
“”The New York Post article is completely untrue,” said Oracle spokeswoman Deborah Hellinger.”

December 4: 451 COS Theory – 451 Group survey highlights user concerns over Oracle’s proposed ownership of MySQL
“Everyone seems to have an opinion about whether Oracle should be allowed to acquire the MySQL database along with Sun Microsystems. What do open source software users think? We asked the members of the “CAOS user community”* to tell what they thought of the proposed deal, as well as share some details on current database usage.”

December 8
: Wall Street Journal – Oracle/Sun Merger Opponents To Speak At EU Hearing
“Microsoft and SAP compete with Oracle and have already told antitrust regulators they oppose the merger. Both have been confirmed as speaking at a hearing Thursday and Friday in Brussels… Swedish network equipment vendor L.M. Ericsson Telephone Co… is attending the hearing to support Oracle… Other people scheduled to speak during the hearing include Michael Widenius from Monty Program Ab who created the MySQL database, as well as open source advocates the Software Freedom Law Center.”

December 8: The Associated Press – EU Antitrust Chief Slams Senators on Oracle Deal
“The European Union’s antitrust chief said Tuesday that U.S. senators who pressed her to approve Oracle Corp.’s takeover of Sun Microsystems Inc. should stop interfering in Europe’s affairs and prioritize U.S. health care reform.”

December 9: Fluendo Group Concerned over EC threat to open-source investment
“The Fluendo Group believes that the Commission should abandon its view that any open source software product represents a price constraint on proprietary vendors, regardless of actual competition. If this precedent is established a vital source of funding for OSS vendors will dry up.”

December 9: The Financial Times – Rival dismisses antitrust issues in Oracle/Sun deal
“Oracle’s proposed acquisition of Sun Microsystems did not raise any significant antitrust issues and was likely to close soon in spite of objections raised in Brussels, according to Steve Mills, head of IBM’s software division and one of Oracle’s biggest rivals.”

December 9: Matt Asay – MySQL and a tale of two biases
“The license works, as its co-author, Eben Moglen, recently articulated. That is, it works to preserve software freedom. It says nothing about Widenius’ freedom to make money from MySQL, nor should it. That’s a business model question for him to overcome, not a political question for him to lobby.”

December 10: 451 CAOS Theory – The case against the case against Oracle-MySQL
“Matt Asay is right, in my opinion, to point out the inherent bias in the case Monty Widenius et al have made against Oracle’s potential ownership of MySQL. I would go further, however, in stating that the case being made against Oracle is flawed by the fact that it is so self-serving.”

December 10: Financial Times – Oracle summons support for EU hearing
“According to a person familiar with the schedule for the hearing, users that would lend their support to Oracle’s case include Ericsson, Vodafone, Sabre and BBVA, as well as the UK Atomic Weapons Agency and National Health Service.”

December 10
: Financial Times – Oracle accuses Brussels over Sun evidence
“Oracle claims “many if not most” of the two dozen customers cited in the Commission’s statement of objections “do not support the Commission’s theory of harm”. The US group also argues that the views of some of the biggest-name customers have been “simply ignored” by Commission officials – including the likes of General Electric, Fujitsu, Siemens and Nasdaq.”

December 11
: Wall Street Journal – Oracle Fights EU Objections to Its Sun Bid
“Oracle contends that the EU’s executive arm, the European Commission, misrepresented the opinions of database users and gave a “distorted view” of the market by “selectively” quoting from surveys as it put together its case.”

December 12: Monty Widenius – Help saving MySQL
“Without your immediate help Oracle might get to own MySQL any day now. By writing to the European Commission (EC) you can support this cause and help secure the future development of the product MySQL as an Open Source project.”

December 12: Josh Berkus – Snoracle, MySQL and the Death of Dual-Licensing
“The fact is that MySQL AB chose to pursue dual-licensing rather than other business models, and painted itself into a corner with it.”

December 13: Lukas Kahwe Smith – Come on Monty
“If you want to keep control over the copyright of your own code, do not go sell it to VC’s.”

December 13: Björn Schotte – MySQL: from midrange to the enterprise market
“There are many areas where MySQL does not compete with an Oracle, but due to this transition to the web there are also many many situations where MySQL could become a great choice for an Enterprise customer.”

December 14 Eben Moglen – The European Commission and Oracle-Sun
“This is why their argument has nothing to do, in the end, with competition law. Any holder of MySQL, be it for-profit company or non-profit trustee, that didn’t agree to commute the GPL for money would be equally unsuitable from their point of view. Whether Oracle is or is not “competitively constrained” by MySQL is irrelevant to the reasons for their concern.”

December 14: Kirk Wylie – My Open Letter to the European Competition Commissioner
“Delaying this merger over the matter of MySQL would result in far greater anticompetitive results to European consumers of computing technology than even the worst case arguments of biased, self-interested advocates in this matter.”

Copyright/left at the centre of open source business strategies

Below is a rough draft of the cornerstone slide for a new presentation deck I am putting together to explain the various business strategies for monetizing open source software. The aim is to explain every single existing strategy using the elements on this one slide (although I am yet to test it out).

In our previous discussions about business strategies we have noted that there are four elements that shape a business strategy around open source software: the open source software license; the development strategy; the end user license strategy; and the revenue trigger.

As can be seen from the slide above, I have added a fifth element: copyright control. Copyright was previously considered in our research around business strategies but was seen more as an underlying influence than a distinct strategy element.

I have recently come to the realisation that copyright control is not just a part of each of the four elements, and not just a fifth additional element, but should perhaps be considered the central element which profoundly influences the other four.

Copyright control has a symbiotic relationship with both the open source software license (I’ll leave the copyright/left discussion for another day) and the development strategy, and is influential in determining both the end user license strategy and therefore the choice of revenue trigger.

This has become abundantly clear thanks to the discussion surrounding Oracle’s acquisition of Sun and MySQL.

Back in September I speculated that it was copyright, and not licensing or market share, that was at the centre of the European Commission’s concern about Oracle’s future ownership of MySQL:

    “I would argue, that Oracle’s potential control over MySQL is not about licensing, but copyright… copyright ownership does not just impact the ability to license code, it also provides control over potential commercial uses of that code. This is where it could be argued that the EC could be right to have anti-competitive concerns over Oracle’s future ownership of MySQL.”

This week’s comments from EC spokesperson Jonathan Todd confirmed my suspicions:

    Todd said Tuesday that Oracle would become the exclusive holder of the copyright and trademark for MySQL code “which means that despite the fact that MySQL is open source, it could be very difficult for a competitor using MySQL code to sufficiently replace the competitive constraint” that MySQL places on database rivals. The commission is concerned that Oracle could refuse to license MySQL to some companies or for some uses in order to favor its own software. “Just because MySQL is open source, does not mean that if you want to apply it in the commercial context, that you can do what you like with it,” Todd said.

Which is not to say that I agree that there is enough competitive threat to block the deal. But it has highlighted the importance of copyright control in terms of business strategies around open source. As John Mark Walker noted recently:

    “The remarkable thing about the Oracle – MySQL case is that it forces us to put up or shut up in a realistic, fact-based way not clad in ideological robes. Whatever your opinions, you now have a test case against which to apply them.”

Everything you always wanted to know about MySQL but were afraid to ask – part one

Since the European Commission announced it was opening an in-depth investigation into the proposed takeover of Sun Microsystems by Oracle with a focus on MySQL there has been no shortage of opinion written about Oracle’s impending ownership of MySQL and its impact on MySQL users and commercial partners, as well as MySQL’s business model, dual licensing and the GPL.

In order to try and bring some order to the conversation, we have brought together some of the most referenced blog posts and news stories in chronological order.

Part one, below, takes us from the announcement of the EC’s in-depth investigation up to the eve of the communication of the EC’s Statement of Objections.

Part two, takes us from there to the eve of the announcement of Oracle’s concessions.

We will continue to update part three until either the acquisition or the EC’s investigation closes.

September 3: The European Commission announces that it has opened in-depth investigation into proposed takeover of Sun Microsystems by Oracle with a focus on MySQL.
“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. 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.”

September 4: 451 CAOS Theory – The EC is mostly, but not entirely, wrong about Oracle/MySQL.
“Copyright ownership does not just impact the ability to license code, it also provides control over potential commercial uses of that code. This is where it could be argued that the EC could be right to have anti-competitive concerns over Oracle’s future ownership of MySQL.”

September 4: Monty Program Ab Chief Community and Communications Officer Kurt von Finck tells Ars Technica that that copyright and dual licensing is a significant concern.
“If Oracle were to release MySQL under a different license, say the Apache license, this issue would be mitigated to an extent. But for now, Oracle has many more avenues of [MySQL-related] business and revenue than do others.”

September 15 451 CAOS Theory – Oracle *could* kill off MySQL as a commercial product, but probably won’t
“It is impossible to create a fork that can be integrated with non-GPL code (or at least it appears to be.)”

September 17
: Bill Schneider – Would MySQL survive without Oracle?
“MySQL is almost impossible to be monetized. More than 98 percent of the customer base is DIY, and they don’t see any value in paying for support.”

September 22: Oracle CEO Larry Ellison reportedly says Oracle will not spin off MySQL.
“Ellison asserted that Oracle and MySQL do not compete – and he said Oracle has no intention of spinning off MySQL.”

September 30: The Wall Street Journal reported that documents indicate that Oracle intends to use MySQL to compete with Microsoft SQL Server.
“Oracle’s position is that in the market for small to medium-sized business databases, Sun’s MySQL database product, enables the company to compete against Microsoft.”

October 1: Matt Asay reiterates that MySQL’s value to Oracle is about competing with Microsoft.
“Open source is simply a means to an end, and in the case of MySQL, a means to denting Microsoft’s rising strength in emerging markets where Oracle’s expensive database technology doesn’t resonate.”

October 1: Carlo Piana explains why he is assisting Oracle’s legal team to get the acquisition approved.
“It must be passed through as soon as possible, or the company will die. And with it, some of the good development teams that have considerably contributed to the success of Free Software.”

October 8: Former MySQL CEO Marten Mickos urges the EC to approve Oracle’s acquisition of Sun.
“I believe that Oracle’s acquisition of Sun (and MySQL) will increase competition in the database market. And I also believe that if, on the other hand, it becomes difficult or impossible for large companies to acquire open-source assets, then venture investments in open-source companies will slow down, harming the evolution of and innovation in open source, which would result in decreased competition.”

October 11: Oracle CEO Larry Ellison reportedly says Oracle will invest in MySQL.
“He added a new line to the previously four-point list, this one promising MySQL would also receive more money for development and research.”

October 19: MySQL creator and Monty Program CEO Monty Widenius urged Oracle to give up on MySQL in order to land Sun.
“MySQL needs a different home than Oracle, a home where there will be no conflicts of interest concerning how, or if, MySQL should be developed further.”

October 19: Richard Stallman, Knowledge Ecology International (KEI) and the Open Rights Group sent a letter to the EC urging it to block Oracle’s acquisition of MySQL.
“If Oracle is allowed to acquire MySQL, it will predictably limit the development of the functionality and performance of the MySQL software platform, leading to profound harm to those who use MySQL software to power applications.”

October 19: Matt Asay argued that EU’s MySQL inquiry may backfire for open source.
“Why should commercial entities bother fostering community–the very community that makes them less susceptible to hostile takeover and anticompetitive forces–if doing so simply ends up ruining financial returns?”

October 20: Matt Asay and Simon Phipps note Stallman’s apparent admission that the GPL alone doesn’t guarantee software freedom.
“The GPL, which is supposed to be the ultimate guarantor of software freedom, may deliver the opposite.”

October 20: Sun Microsystems announced that it will lay off up to 3,000 people.
“The Board of Directors of Sun Microsystems, Inc. (the “Company”), in light of the delay in the closing of the acquisition of the Company, approved a plan to better align the Company’s resources with its strategic business objectives.”

October 20: 451 CAOS Theory – Closing Oracle out of open source?
“Although it might not be tasteful to all supporters of free and open source software, their very mantras and doctrines dictate their software and communities are open to all equally. Anything less is a contradiction of the core ideology of free and open source software.”

October 20: Carlo Piana – Apache what?
“I don’t see any suitable prospect investor which would be able both to pay the bill for this and to safeguard MySQL as Free Software more than Oracle is.”

October 21: 451 CAOS Theory – What about Woman’s Hour? Free speech, free markets and the future of MySQL
“The only possible argument in favour of the EC blocking Oracle’s acquisition of MySQL is that it is damaging to competition, not that it is damaging to MySQL itself. Otherwise we are asking the EC to rule on whether Oracle is open source-friendly enough to own MySQL, and that is neither something that an organisation like the EC is equipped to answer nor something that it should be asked to decide.”

October 21: Groklaw – Reasons I Believe the Community Should Support the Oracle-Sun Deal
“The most important reason is that opponents are trashing the GPL and calling it a source of “infection” in their FUD submission to the EU Commission.”

October 21: Kirk Wylie – Monty, Stallman, MySQL, Oracle, and Sun: Open Letter Wars
“Unfortunately, saying that you personally dislike something doesn’t provide a valid reason to block an acquisition on competition grounds. Saying that you don’t trust Oracle doesn’t alter the marketplace in a way that disadvantages customers as a whole. Saying that nobody else could make money by selling commercial licenses for MySQL doesn’t mean someone else must be allowed to.”

October 21: An EC spokesperson told The BBC that Oracle has not produced any evidence to ease its concerns.
“Oracle had failed to produce, despite repeated requests, either hard evidence that there were no competition problems or, alternatively, proposals for a remedy to the competition problems identified by the Commission.”

October 21: Tim Bray – The EU and MySQL
“If, in a merger or acquisition, partial control over a financially-insignificant Open-Source project can now be expected to result in many months of anti-trust review, that’s going to have a massive negative effect on the viability of M&A transactions all over the technology landscape.”

October 21: Jeremy Zawodny – Oracle and MySQL
“I haven’t yet seen anyone explain what motivation Oracle has for pouring resources into MySQL, especially if it eats away at their DBMS business on the low end.”

October 22: Ed Burnette – Stallman admits GPL flawed, proprietary licensing needed to pay for MySQL development
“Even if MySQL were owned by Oracle because of its purchase of Sun, the database would still be Free Software. Anyone could use the source code, build their own version, and distribute it to others. But finally Stallman has recognized that may not be good enough because somebody has to pay for this stuff.”

October 22
: Brian “Krow” Aker – RMS, GPL, The Peculiar Institution of Dual Licensing
“Dual licensing forces any developer who wishes to contribute into a position of either giving up their rights and allowing their work to end up in commercial software, or creating a fork of the software with their changes. In essence it creates monopolies which can only be broken via forking the software.”

October 22: New York Times – Weak Points of Sun Deal Come Out in Europe
“The Sun/Oracle acquisition agreement includes no requirement that Oracle make any asset sales or agreements on its business to assuage regulators… Oracle is not required to complete the transaction unless it specifically obtains the European Union’s antitrust approval.”

October 23: Stephen O’Grady – Oracle, MySQL and the EU: The Q&A
“Given that Oracle has a negligible presence in the markets that Microsoft has been successful in, then, I think they’ll be the primary target. Meaning that competition shouldn’t be much of an issue.”

October 23: Karsten Garloff – The case for independence – Oracle, Sun and what to do with MySQL
“The present danger for MySQL shows how dependence on a single company (brought about by a dual-licensing strategy) puts even the most successful projects at risk.”

October 24: Monty Widenius – The importance of the license model of MySQL or Can MySQL be killed?
“It’s possible to create companies doing support for MySQL, but without the economics, there will not be enough money and incentive to pay enough for the development of MySQL to satisfy the requirement of all the MySQL users.”

October 24: JavaWorld – Who Should Oracle Sell MySQL To?
“It’s easy to suggest that Oracle should sell to a “suitable third party?” That’s just talk. The potentially significantly more difficult thing might be to actually find a buyer that meets the definition of “suitable” to all involved.”

October 25: Sacha Labourey – SUN vs./and ORCL: the failure of the dual licensing model?
“Some of the ex-MySQL co-founders who now ask for ORCL to let MySQL go are responsible for the current situation: their choice of a dual license business model years ago is what led to the current situation … but also what led MySQL to a 1B valuation. You cannot have it both ways I guess.”

October 25: Brian Aker asks Richard Stallman about MySQL and the GPL at foss.my 2009

October 26: eWeek – EU Strategist Claims an Oracle-owned MySQL Cannot Be Competitive
“It is legally possible but not viable [for Oracle] to be an innovative competitive force [by owning MySQL].”

October 28: Kirk Wylie – Monty’s Almost Certainly Looking for Investment
“I think… Florian is attempting to drum up a capital raise to acquire the MySQL IP to make the problem go away for Oracle, and to convince Oracle and Sun shareholders that Monty and Florian will do whatever it takes to block the acquisition so that they’ll tell Larry to let go.”

October 28: Carlo Piana – Send the GNU GPL to the Amazonia
“Amazon [Relational Database Service] gives us the best evidence that MySQL can be “monetized” by offering it in a Software As a Service setting. This can happen with GNU GPL licensed software and without receiving any special permission from the copyright holder, contradicting all claims that there is no viable way to fund development of a Free Software project without a dual license.”

October 29: Oracle updated its its Sun acquisition FAQ to include plans for Glassfish, Netbeans, MySQL and Openoffice.org
“Oracle plans to spend more money developing MySQL than Sun does now. Oracle expects to continue to develop and provide the open source MySQL database after the transaction closes. Oracle plans to add MySQL to Oracle’s existing suite of database products, which already includes Berkeley DB, an open source database. Oracle also currently offers InnoDB, an open source transactional storage engine and the most important and popular transaction engine under MySQL. Oracle already distributes MySQL as part of our Enterprise Linux offering.”

November 2
: MySQL rival was Oracle not Microsoft-Widenius
“The largest and the most common rival was Oracle. In every deal we were competing against Oracle… there is very little money to be made on the Windows side for MySQL. They are not going to make a profit there. The big money is on the Linux side where MySQL already successfully competes with Oracle, and where MySQL has put all their efforts during the last 10 years.”

November 4
: Financial Times – Oracle braced for EU objection on Sun deal
“The US software company has refused to offer any concessions to European regulators to meet their concerns about the deal, according to one person close to the process. That has left Brussels close to issuing an official statement of objections, the first step on the path to blocking it, this person added… Some suggest that Oracle has little to lose by waiting to see Brussels’ precise concerns. It would then still have time to offer concessions or try to mount a legal fight.”

November 4: Matt Asay – Amazon’s move mocks EU’s fear of Oracle
“Amazon’s RDS proves that strong, viable competitors to MySQL can arise from within the MySQL community, which disproves the EC’s argument that Oracle’s control of MySQL will somehow crush competition.”

November 4: Forbes – What If Larry Leaves Sun At The Altar?
“The main deal protection for Sun shareholders is a breakup fee of $260 million, plus up to $45 million in expenses. By way of comparison, that’s about how much Oracle earns every 20 days.”

November 5: John Mark Walker – Open Source: More than a License
“The remarkable thing about the Oracle – MySQL case is that it forces us to put up or shut up in a realistic, fact-based way not clad in ideological robes. Whatever your opinions, you now have a test case against which to apply them. In the past, I decried the software freedom debate as much ado about nothing – the 21st century equivalent of how many angels can dance on the head of a pin. But now we see it in real-world terms where something tangible is at stake.”

November 5: New York Times – E.U. Faces Tricky Decision on Oracle Deal
“The dilemma has prompted speculation that the best outcome for Ms. Kroes would be for Oracle to drop its interest in buying Sun, relieving the regulators of the need to make a choice.”

November 5: Wall Street Journal – SAP’s ‘Invitation’ to Oracle
“On September 15, less than two weeks after the Commission launched its extended probe, SAP CEO Leo Apotheker wrote a letter to Oracle’s Larry Ellison. The letter, which we have seen and hasn’t previously been reported on, reads in full: “As you know, we have significant concerns about Oracle’s proposed takeover of Sun. We renew our invitation to meet to attempt to resolve our concerns and other open issues between our companies. Please let us know if and when you would like to meet.””

November 6: eWeek – Former CEO: MySQL’s Installed Base Will Keep it Independent
“”MySQL most certainly competes with Oracle,” Mickos said. “And successfully so. But what must be remembered in terms of dollars in that competition, it is not significant enough to warrant an antitrust consideration… “I don’t specifically have an opinion on where it should be,” Mickos told eWEEK. “I’m just saying that there’s no rational argument for not letting the company who’s buying Sun, have all of Sun.””

Continue to part two.

What about Woman’s Hour? Free speech, free markets and the future of MySQL

A controversial issue in the UK this week is the BBC’s decision to invite the British National Party – the far-right, whites-only political party – to appear on Question Time, the BBC’s flagship political debate programme.

Critics fear that the move will legitimise the BNP’s far-right views, while the BBC has defended the invitation on the grounds that its role as a politically neutral public service broadcaster would be undermined if it excluded the BNP – which won its first European Parliament seats this year with an estimated million votes.

To me it is clear that no matter how abhorrent the BNP’s policies on certain issues may be the BBC has a duty to invite it to participate as it is a legitimately recognised political party. We live in a society that protects and promotes free speech with the only limit being when the speech in question goes beyond what is deemed to be legally acceptable.

Many would argue that the BNP’s policies have already overstepped that mark, and I personally have a lot of sympathy for that view, but the illogical nature of the argument against the BNP appearing on Question Time is that campaigners are not seeking to prevent the BNP appearing on the BBC at all, but only from appearing on Question Time.

MP for Neath Peter Hain has stated that the BBC’s “obligation to respect the right of a minority who have voted for the BNP… is already adequately upheld in BNP party election broadcasts, and when they are interviewed on political programmes such as Today or Newsnight.”

On Monday night Hain appeared on Newsnight (UK residents only) to attempt to explain to an incredulous Jeremy Paxman why it was okay for the BNP to appear on some BBC programmes but not others, prompting Paxman to ask facetiously; “what about Woman’s Hour?”

I was reminded of this discussion while reading the open letter to the European Competition Commission by Richard Stallman, Knowledge Ecology International (KEI) and the Open Rights Group arguing that the EC should block Oracle’s acquisition of MySQL via Sun. It followed shortly behind the press release sent out by Monty Widenius which explained why he believes Oracle should sell off MySQL to ensure that it is in a position to acquire Sun.

The overall tone of both documents imply that it would be okay for some vendors to acquire MySQL but not others, and that Oracle is not a suitable candidate. The Stallman/KEI/ORG letter explicitly states: “MySQL was acquired by Sun in February 2008, in a transaction welcomed by many users because of Sun’s good reputation among advocates of FLOSS software, and a belief that Sun would position MySQL as a strong competitor.”

Meanwhile Monty Widenius’ press release states: “Oracle should resolve antitrust concerns over its US$7.4 billion acquisition of Sun by committing to sell MySQL to a suitable third party.”

So it was okay for MySQL to be acquired by Sun and it would be okay for MySQL to be acquired by a “suitable third party” but it is not okay for MySQL to be acquired by Oracle.

The “What about Women’s Hour?” response to this letter is “What about IBM?” Would Big Blue be considered friendly enough to FOSS to be allowed to acquire Sun and MySQL had it gone ahead with its plans? What about SAP? Or EMC? Or HP? While we’re asking questions, where were these campaigners when Yahoo was buying Zimbra? Or Citrix was buying XenSource? Or VMware was buying SpringSource?

The answer, of course, is that those acquisitions were not seen to be potentially anti-competitive. We live in a society that protects and promotes free markets with the only limit being when the impact on competition goes beyond what is deemed to be legally acceptable.

It would be understandable if the complaints focused on the negative impact on competition. However, the Stallman/KEI/ORG letter only mentions competitiveness in passing, and Monty Widenius’s press release doesn’t refer to it at all.

Instead they have resorted to spreading what can only be described as fear, uncertainty and doubt.

“If Oracle is allowed to acquire MySQL, it will predictably limit the development of the functionality and performance of the MySQL software platform,” begins the Stallman/KEI/ORG letter.

Florian Mueller, quoted in Monty Widenius’s press release, took things a step further: “every day that passes without Oracle excluding MySQL from the deal is further evidence that Oracle just wants to get rid of its open source challenger.”

It is a claim that borders on the absurd. Could it not be that every day that passes without Oracle excluding MySQL from the deal is further evidence that Oracle just wants to keep MySQL and use it to its advantage? Not least since Larry Ellison said Oracle has no intention of spinning off MySQL and further promised that MySQL will receive more money for research and development.

The Stallman/KEI/ORG letter further describes Ellison’s statement that MySQL does not compete directly with the Oracle Database as “outlandish” despite the fact that it reinforces the competitive history of MySQL, as confirmed recently by former MySQL CEO Marten Mickos.

We have previously noted that Oracle could kill off MySQL as a commercial product if it wanted to, but probably won’t, but that the acquisition does pose a potential threat to the the competition.

The only possible argument in favour of the EC blocking Oracle’s acquisition of MySQL is that it is damaging to competition, not that it is damaging to MySQL itself. Otherwise we are asking the EC to rule on whether Oracle is open source-friendly enough to own MySQL, and that is neither something that an organisation like the EC is equipped to answer nor something that it should be asked to decide.

Oracle *could* kill off MySQL as a commercial product, but probably won’t

Before I even start this post I am going to repeat our view that Oracle is well aware that it has little to gain from killing off MySQL and that we expect MySQL to become the scale-out database for non-transactional web applications and to compete with SQL Server in departmental deployments.

That said there has been some interesting discussion on Twitter this week in response to the European Commission’s investigation of Oracle-Sun about whether Oracle could – in theory – kill off MySQL. Here’s a Q+A explaining my view as to how Oracle could kill MySQL but probably won’t, and why MySQL AB’s choice of dual licensing and the GPL has come back to haunt Monty Widenius.

Q. Oracle can’t kill MySQL even if it wants to, because its open source. Right
?

A. Not really. The existing code will always be under the GPL but Oracle is under no obligation to release future developments under the GPL. It could theoretically continue to develop MySQL as a proprietary product, leaving the GPL version behind. Other developers and vendors could take the GPL code and continue its development, but they would be limited in their commercial exploitation of it.

Q. How so?

A. As Monty Program AB Chief Community and Communications Officer Kurt von Finck explained to Ars Technica, “MySQL’s licensing model gives the copyright holder a higher level of control than the rest of the community and the exclusive ability to provide certain kinds of products and services that third-party vendors cannot.” As the sole owner of the MySQL copyright Oracle would have the ability to decide who could license the code commercially for integration with non-GPL code, for example.

Q. Who does that impact?

A. As previously discussed, Oracle would theoretically have the ability to impact products that enable MySQL to better compete with Oracle’s database products, such as ScaleDB, Tokutek, Infobright and Kickfire.

Q. But that is a commercial contract issue isn’t it? What does it have to do with open source?

A. True, this is not really an open source issue but a copyright issue. However, the combination of GPL and copyright ownership also impacts the ability to fork – one of the apparent benefits of open source. Monty Program is free to build a business around MySQL but its commercial opportunities are limited. As Von Finck told Are Technica: “Anything we do will have to be GPLed. Oracle does not have this constraint.”

Q. That’s a bit tough on Monty Program isn’t it?

A. Not really, since its founder also created MySQL and was a member of MySQL AB, the company that decided to use the GPL and dual licensing to enjoy the benefits of the open source distribution model while restricting the ability of would-be forkers to compete. Oracle would simply being enjoying the same benefits of copyright ownership as MySQL AB.

Q. So it’s impossible to create a fork of MySQL then?

A. No, but it is impossible to create a fork that can be integrated with non-GPL code (or at least it appears to be – ScaleDB’s Mike Hogan has argued that it can be done via an open source intermediary layer, Monty Widenius believes vendors would need a commercial MySQL license). A company would be able to fork MySQL without the commercial opportunities however – Monty Program already has.

Q. So commercial licensing isn’t necessary to create a business around MySQL?

A. Not necessarily no. Non-GPL licensing drove the bulk of MySQL AB’s early revenue but, according to the company’s former CEO, Marten Mickos, in later years more money came from support subscriptions. A company like Red Hat, for example, could therefore take the code and create a pure open source subscription business – but it would have to invest in hiring the best MySQL developers and support engineers to differentiate it from the other MySQL support providers, and it wouldn’t be able to use the MySQL brand.

Q. Why?

A. Because Oracle owns the MySQL trademark. Hence Monty Program’s version of MySQL is MariaDB. This is also an impediment to the ability to fork, although not as significant as copyright in my opinion. MariaDB already has a significant profile.

Q. What about Drizzle, that’s under the BSD license isn’t it? And copyright for contributions are owned by the contributors.

A. That is true of community contributions, according to the FAQ. But according to the discussion in this thread, the copyright for the majority of the code is owned by Sun and only Sun can sell non-GPL licenses for it. When Oracle acquires Sun, it will assume that ownership. Arguably, if the Drizzle developers wanted to prevent Sun/Oracle from selling non-GPL licenses, they should have used the GPL for community contributions along with distributed copyright ownership.

Q. How so?

Because then Sun/Oracle would have to get the permission of the copyright owners to offer it under a non-GPL license. It has no such requirements for BSD code.

Q. How has this happened? I thought the right to fork was a key benefit of open source.

A. It is, unless the license is GPL and the copyright for the code is wholly owned by a single vendor or individual, in which case the vendor or individual has rights that are not available to would-be forkers.

Q. So is this situation unique to MySQL?

A. So far. At least in terms of the fact that the project is about to be acquired by a rival, and the creator of the original project is trying to create his own fork – and would apparently like to have the same commercial opportunities as the copyright owner. But this could theoretically happen to any project licensed under the GPL where the copyright for the code is wholly owned by a single vendor.

Q. So could Oracle kill off MySQL or not?

A. The community project, no. The commercial product, yes – if it wanted to.

Q. And does it want to?

A. As stated above, our view is that Oracle is well aware that it has little to gain from killing off MySQL and that we expect MySQL to become the scale-out database for non-transactional web applications and to compete with SQL Server in departmental deployments.

Q. But?

A. If Oracle is planning to invest in the long-term future of MySQL it could put an end to this speculation by at least hinting at what it plans to do with it, as it has with its advert regarding Sun’s hardware and operating system.

Q. Assuming Oracle did want to kill MySQL as a commercial product – can an open source community project survive a hostile acquisition?

A. We considered this question in a recent 451 Group report (clients only). One of the problems with testing this theory is that there have been very few, if any, hostile mergers or acquisitions of open source software vendors to learn from. There are some clues from looking at the history of commercial open source vendors that have ceased trading, leaving the open source projects to live on via SourceForge.

Q. And?

A. When Mindquarry, shut down the firm’s founders were all hired by Day Software, and stated that as long as there was an active community, they intended to continue their commitment to the software. SourceForge statistics for the project indicate that it has been inactive since the day it was registered. Similarly, the Ringside Social Application Server software may have outlived its corporate sponsor, which closed its doors in October 2008, but it has not been updated since July 2008, according to SourceForge statistics. On the other hand, openQRM continues to be an active project with more than 35 developers led by maintainer Matt Rechenburg, despite the closure of Qlusters in July 2008.

Q. What differentiates openQRM from Mindquarry and Ringside?

A. A committed project leader and an active community of developers. We would expect MySQL (or MariaDB) to enjoy both, and at a scale that dwarfs that of openQRM.

Q. This is all very theoretical.

A. Yes it is, but it highlights the importance of thinking through the long-term implications of licensing and copyright assignment. If you don’t want to end up in the situation faced by Monty Program, don’t go GPL with full copyright assignment.