12/13/2009
05:07 PM
Bob Evans
Bob Evans
Commentary

Global CIO: Oracle Customer Comments Will Force EU To Yield

Oracle customers last week crushed the EU's case against Oracle by saying its databases don't compete with MySQL. But will the EU listen?



After six months of the EU's underhanded attempts to derail Oracle's acquisition of Sun via back-room maneuverings and political gamesmanship, we saw once again late last week that the sunshine of truth is indeed the best disinfectant.

With a dozen Oracle customers shooting down the EU's contention that MySQL competes with Oracle's databases, even the reality-challenged anticapitalist Eurocrats will have a hard time glossing over those customer presentations in their ongoing attempt to make the world believe that up is down and war is peace and MySQL competes with Oracle's databases.

On top of that, Oracle early this morning released a list of 10 commitments to MySQL customers and developers that should alleviate any rational concerns about its intentions to keep MySQL fully open and accessible, with no unfair advantages accruing to Oracle over other database vendors. (See adjacent Global CIO blog post called "Oracle Makes 10 Commitments To Seal EU Deal".)

As for the irrational concerns sure to be raised by the dyed-in-the-wool ideological opponents of the deal, well, they're not interested in either fairness or free-market competition so to me their considerations are moot in light of these two huge steps forward for Oracle.

So with thanks to a strong overview piece in the Wall Street Journal, let's go to the the (virtual) videotape:

**The British telecommunications company Vodafone told the EC last week that Oracle's databases do not "constitute direct substitutes to Sun's offerings."

**Fujitsu Services Ltd said the MySQL and Oracle databases "operate in different markets."

**General Electric said while "both parties' offerings may on the face of it share some functionality, they are qualitatively different."

**McAfee said the databases from Oracle and MySQL don't "constitute direct substitutes."

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**The Oracle Applications User Group, which has been around for 20 years and has members from more than 35 Fortune 100 global corporations, said in a recent letter to the chief EU competition-stifler Neelie Kroes: "With respect to MySQL, we expect Oracle will make contributions to the community as a whole that will make MySQL a viable and vibrant choice for enterprise database solution consideration. Our international membership fully supports the acquisition and feels it would increase competition."

**Deutsche Borse Group said it does "not see a negative impact of the Sun/Oracle transaction."

**Nasdaq OMX Group, commenting on the existence of MySQL alternatives, said, "We would most likely have chosen PostgreSQL if MySQL was not available."

**Spanish bank BBVA, the U.K. National Health Service, an Oracle user group represented by BT Group, Swedish cell-phone maker L.M. Ericsson, the British Atomic Weapons Agency, and Sabre Holdings Corp. were among other Oracle customers that either presented closed-door support for Oracle in Brussels late last week or offered strong written support.

In addition, Oracle said that 200 of its customers were writing letters to the EU informing it of their support for Oracle's acquisition of Sun.

On the other side of the scales, the EU parity-pushers were also expected to hear from opponents of the Oracle/Sun deal, including EU homeboy SAP; the man who developed MySQL; and, in something of a shocker, Microsoft—the former EU whipping boy now apparently eager to be spared the lash and to play the role of EU throne-sniffer.

Microsoft apparently thinks global corporations will be impressed with its toadying up to the bureaucratic outfit with which it clashed so bitterly over the years, and see in that action evidence that Microsoft's an aggressive and innovative global leader in enterprise technology. But if they do indeed think that, they will be profoundly wrong.

Conversely, it's a stroke of genius on Oracle's part to get its customers out in front of the European Commission that's been holding up Oracle's acquisition of Sun for the past six months in a pathetically poorly camouflaged effort to restrain the growth and impact of U.S.-based Oracle in Europe and other parts of the world. Here's why its all-in raise will cause the EU to back down:

The EU says it wants to protect customers from anticompetitive blowback from the deal, and to ensure that Oracle doesn't lock MySQL away in a tower or a dungeon. Well now a wide cross-section of such customers have spoken directly to the EU of their own free will, and in the face of such presentations it will be hard for even the shameless EU market manipulators to continue to claim that the sky will fall if Oracle is allowed to buy Sun.

A month ago, I suggested that Oracle should turn up the pressure on Kroes and the EU by telling its European customers that, due to the ongoing dishonest and onerous intrusions by the EU into the private marketplace, Oracle would be forced to suspend its operations in the EU and would therefor begin cutting off service and support to Europe-based customers starting Jan. 1, 2010.

Such a move, I said, would generate a wave of phone calls and letter-writing that the EU shut-ins had never seen and would impress upon them the sheer idiocy of their intractable position over a contrived concern that should never have been granted legitimacy in the first place.

Oracle has instead made an equally powerful bet, one that independent European antitrust attorney Silvio Cappelari said could swing the decision heavily in Oracle's favor: "If [Oracle's customers] have a convincing story to tell, this would certainly increase Oracle's chances to get the deal cleared with little or even no concessions."

Another lawyer, though one with very strong subjective feelings toward the outcome, also felt the testimony by Oracle's customers could carry the day. Thomas Vinje, the outside counsel heading up Oracle's case before the EU, said last week, "There can't be a better voice than customers'. The customers said that there is robust competition in the market."

Indeed they did, and indeed there is. And now, if only the EU wonks will be willing to see that reality and focus on the rule of law instead of the rule of CYA, Oracle and Sun and their many thousands of customers and millions of users around the globe can get back to enhancing business value and customer value through information technology.

That also means the EU will be free to look for its next shakedown target, but hey—we'll deal with that one when it arises as, unfortunately, it inevitably will.

RECOMMENDED READING:

Global CIO: Larry Ellison's Goodby Letter To European Customers

Global CIO: Why Oracle's Larry Ellison Will Tell The EU To Pound Sand

Global CIO: Oracle, Larry Ellison, The EU, And MySQL

Global CIO: Oracle Trapped By EU Politics As Sun Employees Suffer

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

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