Where is the outrage over open source acquisitions?
By Tom Foremski - February 28, 2006
By Tom Foremski for ZDNet
I am glad that some of my fellow ZDnet bloggers have caught up with this issue of Oracle buying up the open source movement. George Ou points to my Feb 16 post and references Dana Blankenhorn's Feb 17 and Feb 21 post.
George makes a good point that:"it doesn't seem to getting the kind of outrage that I expected."
There is a great comment left by one of the our wonderfully anonymous but absolutely clued in readers, Sxooter which lays things out quite well, the box of proprietary technology Larry Ellison has drawn around one his most troublesome comeptitors, MySQL.
[BTW, the reason MySQL did not take Larry's offer is that the company recently received financing from SAP and Intel and those companies have a self interest in maintaing an open source movement.]
Most of the comments on this issue continue to say that it is not possible to buy the open source movement. Yes, technically, this is true because development communities can fork off and continue on their merry way.
But this is a psychological battle and Mr Ellison is extremely good at shots across the bow, and "talking down" a competitor. In this case, actions speak louder than words.
Mr Ellison's strategy pours a bucket of cold water over the best efforts of the venture capital community to create more open source projects and companies that could be troublesome to Oracle. And one of those potential thorns in Oracle's side is the extremely well capitalized Ingres, a relational database company bought by investors from Computer Associates and staffed by a first tier management pack.
This is a company that in many ways, is typical of the VC investments being made in this sector. The goal is to recruit or acquire a developer community around an open sourced software product. Then sell services to enterprises below Oracle's costs.
The open source developer community does the development work and the company providing the enterprise services gets revenues and maybe gets sold. (If you are Ingres, you don't attract a hot-shot management team unless you promise a lot of gold...)
By Tom Foremski - February 28, 2006 | Permalink | Category: Disruptive
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Comments (1)
Tom,
In many respects, you are spot-on. It must have sent a chill down the spine of the open source community to see the following quote in a Business Week story that preceded the acquisition of Sleepycat: "One source close to the talks [the rumored JBoss talks] says these deals may be just the beginning. 'Larry and [Oracle Co-President and CFO] Safra Catz have a clear plan to control the entire open-source [software] stack,' the person says."
I'd bet that anonymous quote did not come from the open-source camp.
Why is Oracle so interested in open-source all of a sudden? I don't think this is about Oracle moving into open-source so much as attempting to consume those open-source users into the larger Oracle machine. Oracle has made a number of acquisitions in an effort to recapture those customers who had previously chosen to do business with non-Oracle suppliers. I see this as an attempt to force those customers back to the Oracle standard, the Oracle model and the Oracle revenue stream.
For example, many believe that Oracle's acquisition of InnoDB last Fall effectively controls the main transaction engine under MySQL which, in turn, inhibits their ability to move into the enterprise where Oracle makes billions. It looks like Oracle is attempting to widen the moat around their closed-source fortress to lessen the pressure on their pricing structure.
Why hasn't Oracle open-sourced any of their flagship products? I believe it is because the products that have 95 percent operating margins fund the consolidation strategy that Oracle is desperately hoping will revive its listless stock price.
It appears that the technology industry and its outsized egos never learn from history. Microsoft was in denial about Java. Sun was in denial about Linux. Is Oracle similarly in denial about customers' desire for choice? Oracle in its hostile takeover of PeopleSoft drove customers to SAP. There is no reason to think that Oracle's latest acquisition binge won't drive customers, who want more choice not less, to business open-source.
Dave Dargo
Chief Technology Officer
Ingres Corporation
Posted: February 28, 2006 6:41 PM